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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
UNITED WE CAN
ALLAHABAD BANK RETIREES’ WELFARE SOCIETY Registration No. 33020/17 under M.P.Society Act -1973
Affiliated with All India Allahabad Bank Pensioners & Retirees Association
Collection of THOUGHT PROVOKING & INFORMATIVE LETTERS WRITTEN BY S.K.MISHRA TO BANK PENSIONERFS
PRESENTED BY SHRI K.K.DOGRA
VICE PRESIDENT
All India Allahabad Bank Pensioners & Retirees Association
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
FOREWORD
Dear Comrades, Bhopal – 04-01-2018
The retirees and pensioners of Banks, started to unite & form associations only when a group of pensioners found that they have been deprived of some
benefit by the Bank & or I.B.A. Very few vigilant sufferers started individual
scattered efforts for getting the legitimate dues through judiciary.
The first such joint effort was started by Late Shri Jaigovind Rai, one of the
most respected leaders of Officers of Allahabad Bank, by forming an Association of Allahabad Retirees. It apparently was for the cause of Gratuity to the Old
Scheme Pensioners of Allahabad Bank. Other pensioners hardly knew this development; for the reason that the legal battle started by him prolonged for
years in judiciary.
Even after the industry wide Pension Regulations 1995, the pensioners did
not think for unification in Allahabad Bank and it was only after VRS 2000 Scheme, when pensioners confronted with injustice by denial of benefit of Reg-
29(5), the efforts were restarted for unification of pensioners of Allahabad Bank. Shri S.K.Mishra with 20 pensioners decided to fight against the injustice and filed
the Writ Petition in High Court to get the justice.
Here after he started making parallel efforts to awaken the retirees and
pensioners of Allahabad Bank, by writing letters in the matter of pension and e-
mailing these letters to the colleagues. I used to receive his e-mails, while I was in service and representing Officers of Allahabad Bank as General Secretary of All
India Allahabad Bank Officers Association. Having personal association with me, Shri S.K.Mishra used to contact me in person and always discussed the issues
and concerns of Bank Pensioners. He had always been suggesting me to float the Retirees & Pensioners Association with patronage of AIABOA / AIBOC. Thus I
admit that the idea of Shri S.K.Mishra worked as seedling in my mind for taking up the matter with AIBOC for formation of the Association of Bank Pensioners,
which could ultimately take shape in late 2012, with the help of AIBOC and AIABOA, after the Second Option for Pension when due to demand & pressure
from affiliates, AIBOC decided to float Pensioners & Retired Employees
Association.
Shri S.K.Mishra continued his mission of awakening the Bank Pensioners by witting thought provoking and informative letters & e-mailing the same to me
also. These letters, I think now must be given a form of collection as guide &
memory to the bank pensioners. I am therefore presenting this collection through Allahabad Bank Retirees’ Welfare Society. Hope this will help and inspire all
concerned.
Comradely yours
K.K.Dogra
Ex-Director of Allahabad Bank, Former General Secretary & President of AIABOA
Vice –President of All India Allahabad Bank Pensioners & Retirees Association
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Comrades, Bhopal – 20-01-2018
I feel honored by being part of this book of collection of letters, e-mails and
articles of Sh. Shivkumar Mishra on the various matters concerning Bank Pensioners. I have been deposed with a difficult responsibility of giving critical
comments on this collection. For last many years, I have close association with Bank employees, while being office bearer of All India Allahabad Bank Officers
Association and now got opportunity of continuing the association with retirees also as General Secretary of AIABPARA. I have always been confronting with the issues
of working employees/officers while in service, but could come to know the more difficult issues of the bank pensioners, through the e-mails and letters written by
Shri S.K.Mishra.
Shri Mishra after his voluntary retirement way back in 2001 had started
writing on the issues of the Bank pensioners. He fought the case of benefit of Regulation -29 to SVRS pensioners and approx.800 such pensioners were benefited
by the pursuit stared by Shri Mishra. He never appeared tired while studying and pointing out the injustice towards pensioners, done by IBA/Banks in pay revisions.
He had written on several such matters to bank pensioners by his e-mails and letters. Some of these are very much relevant even to-day and these will certainly
work as awakening drive for the common cause of bank pensioners.
Through these letters Sh. Mishra has not only analysed the issue confronted with , but also informed to the pensioners, the way-outs and the remedies that can
be adopted for bringing the justice to the Bank pensioners.
Some other articles of Sh.Mishra, particularly on history of labour movement
and also on the recommendations of Pay Commissions Vs Paying Capacity of Common Men of our Country, has surprised me on the hidden side of his thinking
and ideology. Besides the letters of Sh. Mishra on Bank Pensioners issues, these articles are worth giving a deep thought by one and all. I conclude with my salute
to Sh. Mishra on his informative and awakening letters. Hope the bank pensioners will be benefited with such enriched informative letters and will unite for achieving
the goals that we all dream about.
With best wishes for the success
(S.K.Verma)
General Secretary
All India Allahabad Bank Pensioners & Retirees Association
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
INDEX
S.NO SUBJECT PAGE
1 What Is Pension 5
2 Retirees Ditched By IBA in Past Settlements 6
3 Cost of 100% DA Neutralization to Pre-2002 Pensioners & Cost of Revision of Family Pension and Pension Updating
10
4 Analysis Of Bank’s Action in Giving Benefit of Reg.29 (5) 16
5 Letter to FM Injustice with Pensioners of Banks by IBA in B.P.S 20
6 Issue of Pension Updating By Any One Of Four Options 23
7 One Rank One Pension & Cost of Updating Pension of Bank Pensioners 28
8 Self Sufficiency of Pension Funds for Updating Pension - AIBOC View 31
9 Bank’s Profits Under Pressure For The Year 2015-16 36
10 Increased Load As On Feb-2016 on P.S. Banks on Giving 100% DA
Neutralization to Pre-02 Retired Pensioners 38
11 Whether Pension Funds are Sufficient to Absorb Updating Pension? 40
12 The Ray of Hope after Supreme Court Dismissed SPL In 100% DA Neutralization Matter of Bank Pensioners
44
13 Banks Saved Rs. Rs.11666.93 Crores by curtailing benefits Of
Employees & Pensioners 52
14 How Bank’s Complied with the Rule of Pension Regulations 1995 60
15 Legal Battle On 100% DA Neutralization is Unavoidable 63
16 Fate of Filing Too Many Writ Petitions in Courts by Individuals 65
17 The Fight for Justice by Old Pensioner of Allahabad Bank 67
18 Bank Had To Pay Both – Pension & Gratuity with Interest 71
19 History of Labor Movement & Minimum Wage/Pension Concept 73
20 History of Delaying Dues of the Pensioners by Banks 78
21 Need of United Legal Efforts for Getting Justice to Bank Pensioners 80
22 Whether We Will Ever Care For Paying Capacity Of the People? 82
23 How Pay of Central Govt. Employees Increased Extra By 161% 88
24 The Rule Found As Injustice to Central Govt. Employees, Still Continues to Employees of Banks for More Than 21 Years
94
25 Pension Fund Of Allahabad Bank 97
26 Eligibility Of Benefit Of Reg-26 To SVRS 2000 Scheme Pensioners 100
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Dear Friends, 15-01-2014
Subject – WHAT IS PENSION
We often discuss the matters related to the Pension Rules and seek correct
implementation of the provisions under Pension Regulations 1995. The basics of the Pension
are always to be kept in mind, which were well defined by the Hon’ble Supreme Court, in a
judgment in WP No. 5939-5941 of 1980 (D. S. Nakara and Others Vs Union of India),
decided on 17.12.1982.These are as under -
Purpose - At Para 24. Quote-
“A political society which has a goal of setting up of a welfare State, would introduce as a
welfare measure wherein the retrial benefit is grounded on 'considerations of State obligation
to its citizens who having rendered service during the useful span of life must not be left to
penury in their old age”
Defination – At Para 29. Quote –
“The pensions is not only compensation for loyal service rendered in the past, but pension
also has a broader significance, in that it is a measure of socio-economic justice which
inheres economic security in the fall of life when physical and mental prowess is ebbing
corresponding to aging process and, therefore, one is required to fall back on savings. One
such saving in kind is when you give your best in the hey-day of life to your employer, in
days of invalidity, economic security by way of periodical payments is assured.”
Necessity of Rules for Pension - At Para 30. Quote-
“The discernible purpose thus underlying pension’s scheme or a statute introducing the
pension scheme must inform interpretative process and accordingly it should receive a liberal
construction”
Pension Rules Statutory In Character- At Para 31. Quote -
“That pension is neither a bounty nor a matter of grace depending upon the sweet will of the
employer and that it creates a vested right subject Pension Rules which are statutory in
character because they are enacted in exercise of powers conferred by the proviso to Article
309 and clause (5) of Article 148 of the constitution”.
Conclusion –
(i) Pension is neither a bounty nor a matter of grace depending upon the sweet will of the
employer and that it creates a vested right subject to Pension Rules which are statutory
in character because they are enacted in exercise of powers conferred by the proviso to
Art. 309 and clause (5) of Art. 148 of the constitution;
(ii) The pension is not an ex gratia payment but it is a payment for the past service
rendered; and
(iii) It is a social welfare measure rendering socio-economic justice to those who in the hey-
day of their life ceaselessly toiled for the employer on as assurance that in their old age
they would not be left in lurch. It must also be noticed that the quantum of pension is a
certain percentage correlated to the averages emoluments drawn during last ten
months under pension scheme. Its payment is dependent upon an additional condition
of impeccable behaviour even subsequent to retirement, that is, since the cessation of
the contract of service and that it can be reduced or withdrawn as a disciplinary
measure.
S.K.MISHRA – BHOPAL – 15-01-2016
**************
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Dear Shri Bishwabndhuji, Bhopal - 25-04-2014
The General Secretary, AIABPARA, Kolkata
RETIREES DITCHED BY IBA IN PAST SETTLEMENTS.
The charter of demands for 10th Bipartite Settlement includes demands of retirees and
pensioners and there appears main focus is on two points viz. - Pension Revision and 100%
DA neutralization to Pre-2002 pensioners. I have studied the points relating to the
retirees/pensioners settled by IBA in past settlements, particularly after introduction of
pension to bank employees on industry level. If analyzed with the angle of benefits to
retirees in these settlements the history goes as under –
1. 5th Bipartite –
In joint Note dated 23-06-1995 pertaining to salary revision that was due from 1-11-
1992, although the Pay Scales were made effective from 01-07-1993, the Gratuity
Calculations based on revised Pay was made applicable only for the employees who retired
on or after 1-11-1994. Thus while the retirees of date from 1-11-1994 were paid
gratuity based on revised pay scales, but those who had retired between 1-7-0993 to 31-
10-1194, the calculation of gratuity was on old pay scales and thus they were not paid
difference of gratuity amount consequent upon their pay revision given to them from 1-7-
0993. The retires had to per force follow the legal route and fortunately the High court of
Karnataka in WA No 1758-1785 of 2003 decided the matter on 25-5-2012 in favour of the
retirees.
Here I would like to reproduce the comment of the respected judge at page No 29 of this
order-
“It does not require a paranoid mind to suspect that the Unions or
Associations were not as receptive or assiduously loyal to the cause of the
older employees as were of officers and employees in harness.”
Further while recording the final order the judge has written this also-
“The numbers of pensioners have dwindled over the years; their demise has
liberated them from their relative penury”
Though a period of almost 20 year is gone by but these retires have not yet received the
justified and legal dues of gratuity. The matter is pending in Supreme Court where IBA is
representing the Banks in Special Leave Petition (Civil) 28332 -28362 Of 2012 BY IBA .Vs
Y.R.SHENOY & ORS.
Similar was the position of LIC retirees of the corresponding salary revision period. The
Retirees Association of LIC fought the case and in Appeal (civil) 1289 of 2007 by Supreme
Court order dated 12-02-2008 it was decided in favour of retirees of LIC.
I request you to please take up the matter of above Gratuity Case of Bank retires for
discussion in Pensioners Associations platform and suggest the apex leaders to become
intervener in the said case pending in Supreme Court so that all such pensioners are
benefited .
2. 6th Bipartite -
It was to expire on 31-10-1997 but for pensioners the revised Basic Pay effective from 1-
11-1997 was not considered and it was made effective for retirees who retired after 31-3-
1998. Thus pensioners retired during 1-11-97 to 31-3-1998 were at loss, in respect of
B.Pension. None of the retiees or pensioner fought against above injustice and Banks were
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
benefitted by paying lower pension to the approx. 5000 retirees of the period from 1-11-
1997 to 31-4-1998.
3. 7th Bipartite –
The Basic Pay for the pensioners was accepted at 1616 CPI where as the Pay revision was
at 1684 CPI. Thus employees retired during the period were given lower Basic Pension at
around 41% instead of 50% of Basic Pay.
During the block period of this settlement the SVRS -2000 Scheme was offered by Banks
and approx 80000 employees retired under VRS 2000 scheme during the year 2001.
Banks subsequently amended Pension Regulation 28 and denied benefit of Reg.29 (5) to
VRS Pensioners. They were put to double loss in pension – One by Fitment at Pre-revised
Basic Pay with DA at 1616 CPI and Other by not giving benefit of notional addition of 5
years as per Reg.29(5)
A large number of the pensioners (Approx.800) filed WPs in high courts. In the
meantime Supreme Court in Bank of India Vs K.Mohandas case on 27-03-2009 decided
the issue of Reg.29 (5) in favour of pensioners. Union Bank of India, Punjab and Sind
Bank, Punjab National Bank, United Bank of India were also parties in the above case,
thus these only five banks implemented the order in the Month of Sept -2009.
The different high courts based on this order of Supreme Court decided this issue of
Reg.29 (5) in favour of pensioners.
IBA in the Month of August 2009, issued circular to all banks to follow the apex court
order, but most of the Banks ignoring the circular of IBA, preferred appeals in Division
Benches /Supreme Court against applicability of Reg29(5).A large Number of Appeals of
such Banks (Canara Bank, Syndicate Bank, Union Bank of India ,Indian Bank, Indian
Overseas Bank, UCO Bank, Bank Of Baroda, Vijay Bank State Bank of Mysore Central
Bank,) were dismissed in WA No 4279 of 2011 on 8-3-2012 and thereafter only these
Banks passed on the benefit of Reg.29(5) to pensioners; saving cost of interest on due
amounts.
But Vijay Bank & State Bank of Mysore still preferred appeals in Supreme Court and
so was the line of action of Allahabad Bank after orders of High Courts of Delhi, Jabalpur
and Bombay. It was only in the month of March 2014, when Allahabad Bank and Vijaya
Bank passed on the benefit of Reg.29 (5) to VRS pensioners. SBM is still in Supreme Court
and none of subsidiaries of SBI have yet given the benefit of Reg.29 (5) to their VRS
pensioners.
I am going a bit in details of Bank’s actions on the above, to point out that despite
Apex Courts Order and Circular of IBA all other Banks dragged the matter for years just
to earn profits from the unpaid dues of old pensioners. With this attitude IBA/ Banks have
ditched the retirees in every settlement.
In respect of fitment of pension on the basis of pre-revised pat with DA at 1616 CPI,
in above WA No. 4279 of 2011 the appeals of Banks have been dismissed on 8-3-2012.
Some of the quotes from the orders are as under –
“Memorandum of Understanding cannot meddle with the statutory prescriptions.
Nobody can agree by way of a settlement at the behest of an organisation
taking away the benefit conferred on individuals by way of statutes or statutory rules”
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
“Therefore, without any hesitation we can say that the impugned amendment
brought in by the respondents (Bank) is, quite against the Regulations 2(d) and 35 (2)
and the very intent and purport of the Regulations is null and void.”
Various Banks have files appeals in Supreme Court against above orders of different
High Courts and at present such appeals of Canara Bank, Vijay Bank, Syndicate Bank,
State Bank of Mysore, Indian Overseas Bank, are connected with Civil Appeal No 5525
of 2012 of Bank of Baroda Vs. G.Palani & Ors. & also with Civil Appeal No. 5611
of 2012 of Bank of Baroda Vs Geetha Bhatt.
With the history and track records of all the Banks as is evident from their action in
the matter of Reg29 (5), even after the Supreme Court deciding the issue in favour of the
pensioners, only the Banks that are party in the case will implement the order and all
other Banks will wait for any such order from Supreme Court only. Therefore I request you
to consider intervention by Pensioners Associations in the said Civil Appeal so that all
Banks follow the judgment of court.
The case was last heard on 20-07-2012 and pending thereafter. As intervener
pensioners Association may request for early hearing as the matter relates to approx 1 lac
pensioners in the age group of 70 to 74 years.
4. 8th Bipartite –
The mistake at point no.3 was corrected in this settlement but effective from 1-5-2005
and no arrears or increased commutation was paid to pensioners. Here 100% DA
neutralization was given to employees and retirees retired after 1-11-2002, but all existing
pensioner prior to that date continued to at tapered DA rates.
Some of the pensioners filed Writ petitions in Madras High Court against Canara Bank,
Bank of Baroda & Indian Overseas Bank. On 14.12.2012 single judge from Madras High
Court passed order that petitioners who are retirees prior to 01.11.2002 are eligible for
100% neutralization in Dearness Relief as the similar benefit is granted to retirees after
01.11.2002. Further details are in separate letter on this matter.
5. 9th Bipartite –
Second Pension Option was given to CPF optees.
A. In actuarial valuation of pension liability for CPF optees was in reference to number of
CPF optees as on 31-03-2008, who will opt for second pension option. Accordingly the
effective date for these should have been 1-4-2008, but it was taken as 27-11-2009.
Loss of Pension of 20 months & decreased commutation amount to the retirees of this
period (1-4-2008 to 26-11-2009), whereas they contributed for the gap at 156%, that
was estimated on 31-3-2008.
B. The CPF optee employees who retired during the period from 1-4-2008 to 27-4-2010
were counted in actuarial valuation as on 31-3-2008, as working employees thus
contribution from these would have been 2.8 months of Pay of Nov 2007, but they have
to pay 156% of CPF. This was loss to these pensioners. In this matter also several
petition filed by pensioners /employees are pending in different courts.
C. As per Joint Note the second option was also for retirees, but IBA by inserting the word
“Retired On Superannuation” in its circular to Banks created the scope to Banks for
denying to other types of retirees and finally many of the retires had to go to courts
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
and they could get the chance but with much delay and in the meantime Banks earned
profits from the unpaid dues of pension of these retirees.
It is really very much pleasing to know that the apex leadership of three
organisations of Retirees in the Banking Sector viz. All India Bank Pensioners & Retirees
Confederation, All India Bank Retirees’ Federation and Federation of SBI Pensioners’
Associations met together and developed coordination for common cause of Bank
Pensioners.
Hope our organisation (AIBPARC) will put forth the above points for resolving the
issues at appropriate forum and in cases of Gratuity for pre-1994 retirees (Point No 1) in
Special Leave Petition (Civil) 28332 -28362 Of 2012 BY IBA Vs. Y.R.SHENOY & ORS and
also in case of lower fitment of pension at 1616 CPI (Point No. 3) in Civil Appeal No 5525
of 2012 of Bank of Baroda Vs. G.Palani will convince the apex leadership to become
intervener in these two case in Supreme Court.
From Bhopal I assure contribution of Rs.25000/ for legal fund for above cases.
With Regards
S.K.Mishra – Bhopal – 25-04-2014
**************
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Dear Shri Dograji, Bhopal 25-08-2014
Former Director, Allahabad Bank & Former -Vice President - AIBOC
Subject- Cost of 100% DA Neutralization to Pre-2002 Pensioners
Cost of Revision of Family Pension and Pension Updating
I came to know from the SMS of Shri Harvinder Singh, forwarded by you to me mentioning
that IBA has asked the Banks for cost of Revision of Family Pension and Pension Updating. At
the outset I am surprised to hear that IBA has shown such indication for updating the
Pension also, whereas it has declined the demand for the reason of high costs involved.
In the background that on the proposal of 100% DA neutralization to pre-2002 pensioners,
that is said to be forwarded to Ministry of finance for approval of GOI, I have grounds to
believe that the officials of Ministry of finance might have asked the IBA for the costs of
improvement in Family Pension and also the cost of Pension Updating, for following reasons-
1. The family pension has already been improved for RBI pensioners based on a simple
formula that calculates Notionally Revised Basic Pay for calculation of family pension at
improved rate of 30% and a common DA formula and common DA slabs are applicable to
these family pensioners of RBI. The formula adopted brings the Basic Pay of retirees
proportionately at CPI at which the pay has been last revised.
2. Improvement in family pension is also demanded by Bank Pensioners and this will have to
be accepted in line with RBI pensioners, as the Pension Regulations, speak of following
the said line of RBI in case of Bank Pensioners also.
3. After adopting above formula of calculating Notional Basic Pay, the RBI/IBA have thus
visualized that the pension updating can also be done with very little extra load. IBA and
RBI thus might have already discussed with officials of Ministry of Finance on this
formula.
4. The above formula will automatically cover the cost of 100% DA neutralization and thus
within the cost increased a little more, updating of Pension can also be done
simultaneously in the settlement.
5. The General Secretary of AIBRF has in his communication indirectly shown willingness for
such updation, which he has termed as merger of DA slabs and thereafter adopting a
common DA rate and common DA slabs. This might have been seen as inclination
towards its acceptance by UFBU.
6. Thus while IBA /Banks are almost agreeing to give 100% DA neutralization to pre-2002
retirees, improvement in family pension can also be done in line of RBI pensioners and
AIBRF has demanded merger of DA Slabs to adopt uniform DA formula; by adding a very
little more in the cost of 100% DA neutralization, the BJP lead Government, may have
feather in their cap and take credit for such updating the pension on one hand and on
the other, the IBA once again will succeed in ditching the pensioners, by
depriving them of their TRUE UPDATION, which should be done with DA merger
and effective increase, commensurate with it was given in the past pay
revisions to employees .It is reflected in Annexure – I , please study it carefully.
7. Another reason is that coverage of pension scheme is available to the employees
appointed up to 31-3-2010 and to the retirees from 1-1-1986. The number is thus limited
to approx.7.32 lacs only. 2.87 have already retired and thus remaining 4.45 lacs working
employees have the coverage of pension as on 31-3-2014.The figures of Pension Paid &
Actuarial Valuation of Pension Liability Vs Interest Earned on Pension Funds and Statutory
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Contribution by Banks in Pension Fund for the year ended March 2014 are appearing
favorable. The summary indicates that Valuation of Pension Liability for employees and
pensioners for year ended March -13 was Rs. 101882.51 crores; that earned interest of
Rs.8556.93 crores against pension payment of Rs.7235.18 crores for year 2013-14
(Interest met the pension payments) and Valuation of Pension Liability as on March -14
was calculated to be Rs.113545.67 crores, only, for existing working 4.45 lacs employees
and 2.27 lacs pensioners & 0.47 lacs family pensioners surviving out of 2.87 lacs retired
employees. (See Annexure – II). With the trend of retirement out of the limited pension
opted employees, reduction in number of pensioner with mortality rates at different ages,
it is estimated that from year 2015-16 onwards, the interest and normal statutory
contribution will be sufficient to cover the pension liabilities of ever decreasing numbers.
8. In the present settlement with merger of DA of 401 Slabs at 4440 CPI, the net increase in
pay-slip is almost agreed at 11%, increase compared with 17.5% given in last revision.
But in this revision the incremental cost of Pension Liability for increase in pay to
employees, is not being shared by the employees.
The incremental cost of pension liability for increase in pay to employees is calculated at
approx.11.2%,(Against approx.Rs.56250 Crores for 4.45 lacs employees as on 31-3-2014
= Approx.Rs.6300 crores) out of which Statutory Contribution of Banks would have been
10% = Rs.5625 crores and Banks are to contribute extra 1.2% only = Rs.675 crores,
which is much less than what was contributed by Banks in last pay revision. Thus position
of Banks in this settlement is comparatively comfortable in terms of valuation of pension
liability.
9. In view of above, I am to believe that all the above reasons have given the chance to BJP
lead Government to earn credit for updating the pension of Bank pensioners, hence IBA
might have been asked by Ministry of Finance for cost calculations.
Yours Sincerely
S.K.Mishra – Bhopal - 25-08-2014
The cost calculations are based on rational assumptions and data available/collected from
various sources. There can be difference to acceptable percentage from the calculations
based on actual data available with Banks/IBA. The figures so arrived are as under –
1. Cost of 100% DA Neutralization for Pre-2002 retired Pensioners-
Estimated Number of Pensioners as on March -2014 are as under-
Retirees of Period Retired. No. Survived Slab in Mar-14
1-Jan-86 31-Oct-87 4766 1296 1225
1-Nov-87 31-Oct-93 21970 9286 1225
1-Nov-93 31-Mar-98 12620 7376 1088
1-Apr-98 31-Oct-02 97172 77201 954
Total Pre-2002 Pensioners 95159
Out of above the sub-staff are already getting 100% DA as their basic pension is in first
slab. Clerks are benefited a little and officer has the advantage of 100% DA neutralizations.
Total of such approx 75000 pensioners will be benefited by such DA neutralization and
increased cost is estimated at Rs.1546.70 lacs per month in the March 2014 at above
applicable DA Slabs and incremental cost per DA Slab is calculated to be Rs.1.58 lacs for
these eligible pensioners. Assuming increase of 40 Slab in the year 2014-15 the annual cost
will be approx.Rs.193 crores.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
2. Improvement in family pension - Say at 30% as is given to RBI Family
Pensioners and Cost of Pension Updation at 4440 CPI
Now if Family Pension is improved in line with formula adopted for RBI family pensioners,
which aims at notionally revising the Basic Pay of all past retirees proportionately at the
CPI on which revision is sought i.e at 4440 CPI, then the Basic Pension and Family
Pension may be as under calculated on simple formula as per example here under –
Retirees of Period At CPI Basic Pay at Retirement
Notional Pay at 4440 CPI
Notional Basic Pay
Updated B. Pension
Updated. Family Pension
1-Nov-87 31-Oct-93 600 4650 4650 x 4440/600 34410 17205 10323
1-Nov-93 31-Mar-98 1148 9240 9240 x 4440/1148 35737 17868 10721
1-Apr-98 31-Oct-02 1684 14240 14240 x 4440/1684 37545 18772 11264
1-Nov-02 31-Oct-07 2288 22900 22900x 4440/2288 44439 22219 13332
1-Nov-07 31-Oct-12 2836 31700 31700 x 4440/2836 49629 24815 14889
As DA slabs at 4440 CPI are proposed to be merged the remaining DA slab ( 666-401=
265 ) will be common slab to all pensioners and common DA rate at 0.10% ( 2836 /4440
x 0.15%) will be made applicable to all, in such pension updation if done. It is quite
likely.
But the expectation in pension revision for stage to stage fitment for pension will not
be achieved by this for the reason that it does not include the effect of increase of 17.2%,
13.038%, 12.25%, 13.25% and 17.5% given after merger of DA, in last five settlements.
This difference as above is reflected in resultant calculated Basic Pension of
retirees of different block periods, though retired from same position and it will
be big loss in said updation formula. See Annexure- I
The payment of Family Pension estimated for 2013-14 was Rs.560 crores and if above
formula is adopted the cost is estimated to be approx. Rs. 850 crores, increasing the cost
by Rs.290 crores for approx.47000 family pensioners in March 2014.
The estimated cost for such pension updation (If done with above formula) to
Pensioners is calculated to be approx 320 crores for the year 2014-15, which is just
Rs.127 crores extra than the cost 100% DA neutralization for pre-2002 retired
pensioners.
The estimated cost of Pension Updation (In real sense and is expected) with merger of
DA Slabs and effective increase is calculated at Rs.970 crores per annum as on March
2014.The Summary is given as under –
Head Increased cost as per demands
Increased cost as at 4440 CPI That IBA/GOI may do
A. Cost Family Pension Improvement as done to RBI – 30% of Notional B.Pay.
270 270
B. Cost of Pension Updation with DA merger & increase effect 970 320
C. Cost of DA Neutralization to pre-2002 retirees (Included above in B)
193 193
Total Costs = (A + B) 1240 590
Now question may arise, why GOI, IBA and Bank will agree for such improvement in
family pension and Pension Updation that is costing Rs.590 crores PA additionally. The
reply is simple. After permitting improvement in family pension to RBI, it has to be given
13
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
to Bank Pensioners also to appear fair to Bank employees. The DA neutralization is long
pending and the demand can be upheld on the test of Equity by Supreme Courts in
pending many cases, including that of LIC. So while meeting two demand costing Rs. 463
crores (270 + 193), it is prudent to GOI to accept updation of Pension on additional cost
of just Rs. 127 crores and earn goodwill and credit at cheaper rate. Banks will be happy
of being less burdened by Rs. 650 crores and put the issue in cold store for at least next
10 years.
Annexure – I
EXAMPLE FOR SCALE II OFICER RETIRED UNDER DIFFERENT SETTLEMENT
PERIODS
Retiree of Period Basic Present Pension at Merged DA Pension on Updating
From To Pay Pension Tap Rate 100% Neut. At 4440 RBI Expected
1-Jan-86 31-Oct-93 4650 18569.11 19044.58 21857.94 21764.33 33293.54
1-Nov-93 31-Mar-98 9240 19305.82 19897.19 22678.92 22603.02 34305.54
1-Apr-98 31-Oct-02 14240 20302.37 21050.87 23900.91 23746.58 34496.55
1-Nov-02 31-Oct-07 22280 27241.76 27738.92 27738.92 27346.77 34498.16
1-Nov-07 31-Oct-07 31700 31684.15 32110.76 32110.76 31390.98 35088.57
1-Nov-12 Onwards 31700 31684.15 32110.76 32110.76 35293.50 35293.50
Retiree of Period Basic Present Resultant Increase in Pension PM on all four options
From To Pay Pension A. At Tapered Rate
B. With 100% Neut.
C. At 4440 CPI = RBI
With effective Incr.Expected
1-Jan-86 31-Oct-93 4650 18569.11 475.47 3288.83 3195.22 14724.43
1-Nov-93 31-Mar-98 9240 19305.82 591.37 3373.10 3297.20 14999.72
1-Apr-98 31-Oct-02 14240 20302.37 748.50 3598.54 3444.21 14194.18
1-Nov-02 31-Oct-07 22280 27241.76 497.16 497.16 105.01 7256.40
1-Nov-07 31-Oct-07 31700 31684.15 426.61 426.61 -293.17 3404.42
1-Nov-12 Onwards 31700 31684.15 426.61 426.61 3609.35 3609.35
Thus there are four options/ways for updating of pension -
1. By Merger of DA at present applicable rates (Tapered for retirees of period up to 31-10-
2002) and bring all the pensioners at common DA rate and common slabs as has been
suggested by AIBRF, but it will not be bringing 100% DA neutralization to pre-2002
Retirees and should not be accepted .The increase in this case will be nominal as appearing
above in Col A.
2. By Merger of DA at present applicable rates (With 100% DA neutralization to retirees of
period up to 31-10- 2002) and bring all the pensioners at common DA rate and common
slabs. This will not bring effect of proportionate increase that has been given in past pay
revisions.
3. The formula adapted to RBI for family pension purpose may be thought of by IBA as this is
least costing to Banks. By this formula all retirees will again be ditched. IBA stating that this
gives improvement in family pension hence can also be applied for updation of pension. If
pension is updated by this it will be the worst position for pensioners. Please see above
table.
4. Updating of pension on a formula of proportionate increase commensurate with increase in
pay in past settlement is the best option. For this “THE MULTIPLYING FACTORS” for the
14
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
retirees of different settlement periods can VERY EASILY BE CALCULATED BASED ON THE
COMPARATIVE INCREASE IN LAST STAGE OF ANY PAY SCALE.
EXAMPLE - In the proposed settlement DA of 401 Slabs is being merged. It means the
Basic Pay after merger will be 160.15% and 11% Increase is to be given thus the revised
Basic Pay will be approx 176% of present Basic Pay for the employees in Bank as on 1-11-
2012 and for the pensioners retired from 1-11-2012 also. Thus multiplying factor for the
retirees of immediate preceding Settlement Period, can be 1.75 to bring them at par with
those retired after 31-10-2012. Extending the same ration, the position of all retirees of
different five settlement periods can be updated.
FOR SCALE –I AND SCALE II
Retiree of Period Maxim Pay At Last Multiplying Factors Multiplying
Factor
From To Scale I Scale II Scale I Scale II To All
1-Jan-86 31-Oct-93 4260 4650 12.11 12.00 11.32
1-Nov-93 31-Mar-98 8550 9240 6.04 6.04 5.87
1-Apr-98 31-Oct-02 13220 14240 3.90 3.92 3.83
1-Nov-02 31-Oct-07 21040 22900 2.45 2.44 2.48
1-Nov-07 31-Oct-07 29300 31700 1.76 1.76 1.75
1-Nov-12 Onwards 51600 55800 1.00 1.00 N/A
Based on calculations of such multiplying factors for all category of employees (Sub Staff to
Scale VII) applying rational adjustments the multiplying factors shown above are arrived, to
bring retires at logical updation of pension. The expected pension shown above for Scale II
retirees of different settlement period in example above is calculated with these factors.
Hope this can be a formula that will convince all and increased cost is calculated accordingly.
For Family Pension Improvement - Basic Pay to be Notionally Revised at CPI of 4040 as is
done for RBI Family Pension Purpose – Position will be as under for Scale II retirees’ Family-
Retirees of Period Basic Pay N.B.Pay at
4440 CPI Basic Family
Pension DA/Slab Slabs DA Pension
1-Nov-87 31-Oct-93 4650 34410 10323 10.323 265 2735.60 13058.60
1-Nov-93 31-Mar-98 9240 35737 10721 10.721 265 2841.07 13562.07
1-Apr-98 31-Oct-02 14240 37545 11264 11.264 265 2984.96 14248.96
1-Nov-02 31-Oct-07 22900 44439 13332 13.332 265 3532.98 16864.98
1-Nov-07 31-Oct-12 31700 49629 14889 14.889 265 3945.59 18834.59
This formula is likely to be adopted for improvement in family pension at 30% of Notional
Basic Pay at 4440 CPI. This is acceptable to pensioners.
ANNAEXURE II HERE UNDER
15
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
ANNEXURE - II
As Per Balance Sheets of Banks Excluding SBI as it has separate different Pension Scheme.
Bank Pens. Liab.
March-13 Contributed by
Banks 13-14 Interest
Incm.13- 14 Pens. Paid
13 -14 Closing Bal-14
Pens. Liab. Mar-14 Gain/loss
Allahabad Bank 3697.49 590.92 312.89 243.27 4358.03 4143.65 214.38
Andhra Bank 2834.32 177.85 230.15 157.54 3084.78 3180.74 -95.96
Bank of Baroda 7502.04 1080.10 616.31 502.76 8695.69 8259.48 436.21
Bank of India 7404.65 804.95 658.35 605.48 8262.47 8038.24 224.23
Bank of Maharashtra 2772.84 457.90 226.87 207.40 3250.21 3216.27 33.94
Canara Bank 8584.93 149.83 672.06 596.28 8810.54 9035.86 -225.32
Central Bank of India 7190.56 166.74 600.80 578.07 7380.03 8139.02 -758.99
Corporation Bank 2148.55 71.34 184.63 77.00 2327.52 2473.20 -145.68
Dena Bank 1761.94 202.02 149.98 190.88 1923.06 1917.94 5.12
Indian Bank 4521.26 57.07 406.55 318.32 4666.56 4930.31 -263.75
Indian Overseas Bank 4865.10 82.45 408.30 397.65 4958.20 5426.49 -468.29
Oriental Bank Com. 3342.17 106.29 284.08 91.14 3641.40 3832.78 -191.38
Punjab & Sind Bank 2419.87 211.77 209.92 174.73 2666.83 2493.33 173.50
Punjab National Bank 13559.18 358.28 1118.17 652.83 14382.80 15162.79 -779.99
State B of B. & Jai. 2335.53 53.48 216.50 154.01 2451.50 2694.25 -242.75
State Bank of Hyd. 2588.59 126.46 208.64 167.48 2756.21 2892.51 -136.30
State Bank of Mysore 1152.24 222.93 96.26 104.17 1367.26 1323.29 43.97
State Bank of Patiala 2252.73 64.32 208.83 109.17 2416.71 2480.48 -63.77
State Bank of Travc. 2216.64 37.70 207.23 125.44 2336.13 2235.53 100.60
Syndicate Bank 4550.04 572.10 366.94 466.09 5022.99 5048.83 -25.84
UCO Bank 3863.62 472.04 310.84 413.28 4233.22 4655.28 -422.06
Union Bank of India 5991.02 194.81 509.62 380.68 6314.77 6683.81 -369.04
United Bank of India 2317.55 386.66 191.53 301.79 2593.95 3148.70 -554.75
Vijaya Bank 2009.65 268.90 161.48 219.72 2220.31 2132.84 87.47
Total 101882.51 6916.91 8556.93 7235.18 110121.17 113545.62 -3424.45
S.K.MISHRA – BHOPAL - Date 25-08-2014
**************
16
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
AN ANALYSIS OF BANK’S ACTION ON ORDER DATED 13-02-2014 OF SUPREME COURT IN MATTER OF GIVING BENEFIT OF REG.29(5) & ARREARS TO VRS 2000
SCHEME PENSIONERS WITH INTEREST THEREON
Dear Friends,
After a long legal battle Bank has to pay arrears of Regulation 29(5) to VRS -2000
Scheme pensioners.
The summary of the payment figures is as under –
Type of Pensioners Number Arrears Amt. Intt. Amt. Total (Rs Lacs) Intt. Part as % of Arrears Amt.
I Optees’ 454 754.44 243.91 998.35 32.33%
II Optees’ 339 230.56 42.47 273.03 18.42%
Total 793 985.00 286.38 1271.38
Bank has interpreted the order as it suited to Bank. The words in final order of Hon’ble
Supreme Court were --
“We, therefore, deem it appropriate to direct that difference in pension on
recalculation shall be paid with interest at the rate of 9 per cent from the date of
the judgment of the High Court till payment. It is made clear that all employees
are entitled to receive their pension in terms of the Circular issued by the Indian
Banks' Association and in terms of the present order “
Thus the order was on three points-
1. “ …pension in terms of the Circular issued by the Indian Banks' Association “
The circular of IBA on pension payment reads - “.. be paid the arrears of pension based
on the revised calculations from the date of retirement till date.. “
The revised calculations from the date of retirement clearly means that whatever
calculations were done for pension fitment must be done again by giving benefit of Notional
addition of service.
The calculations obviously included commutable 1/3rd of Basic Pension and
commutation value it’s of. But the very brilliant officers of the Bank who dissected the order
have taken the word “ difference in pension “ that suits the Bank and these officers
have been trying to convince that interest is ordered to be paid on this difference in
pension as such if commutation is given interest will not be payable on that amount. THIS
IS THE CASE OF LETTER PERFACT OBEDIENCE OF OREDR BY THE BANK. According to them
difference of commutation value is not pension.
We should be thankful to them that they have not applied their sharp mind further, in
a way that interest is payable only on difference of Basic Pension, therefore it must not be
paid on resulting difference of DA. Thakns to them they paid interest on DA amount also.
2. The second point of order was in respect of interest payment as under –
“… interest at the rate of 9 per cent from the date of the judgment of the High
Court till payment.. “
In a reply to application under RTI in the payment of interest, Bank has in letter no.
HO/RTI/CPIO/724 of 7-6-2014 replied as under –
17
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
“Difference in pension on recalculation has been paid with interest at the rate
of 9% from the date of judgment of Hon’ble High Courts in respective cases…”
But here the obedient and brilliant officers have not followed it in the spirit of above
LETTER PERFACT OBEDIENCE OF OREDR , rather used the word “High Court” as High
Courts in respective cases, and applied the same in respective cases.
By application of such sharp minds of these officers , Bank has paid interest for 125
months to only two pensioner petitioners of Calcutta High Court and for 58, 54 and 50
months to the pensioner petitioners (Total 35) , of Bombay, Delhi and Jabalpur High
Courts.
3. The third point of order was in respect of payment to all pensioners as under-
“ It is made clear that all employees are entitled to receive their pension in
terms of the Circular issued by the Indian Banks' Association and in terms of the
present order “
The other pensioners (Total 793 - 37 = 756), who were not parties in the High Courts,
were to be paid interest in terms of order of Supreme Court. Here the brilliant officers did
not applied the spirit of LETTER PERFACT OBEDIENCE OF OREDR, and over-ruling it
preferred to pay interest to all other VRS pensioners from Aug- 2009 (Referred IBA
circular was dated 16-08-2009) for 55 months. The same circular was lying in dust bin of
Bank for last 5 years, but they have taken the date of IBA circular at par with Judgment of
High Court and elevated the status of IBA to the Status of High Court. Thus the non
respondent pensioners, who have been paid interest for 55 months instead of 125
months, should remain obliged to the officers of the Bank, who often mentioned that
pensioners of Vijay Bank have not been paid any interest.
In the process with application of sharp minds of the officers who interpreted the
order of Supreme Court Bank saved money amounting to lacs of rupees that otherwise
would have been paid as arrears and interest to VRS pensioners. The money so saved is
on following counts –
1. Amount of commutation and interest thereon, payable to pensioners still alive, the major
difference here would be of interest portion as the monthly amount paid has already run
153 months, and commutation factor may meet the value now.
2. But amount of commutation and interest thereon, payable to the family of deceased
pensioners is major portion saved by Bank as for deceased the amount would be
payable monthly only up to the death which obviously will not meet the commutation
value.
Example – Incremental portion of commutable pension is sayRs.300 and age at the
retirement was 52 years that calculates commutation factor of 12.66, the arrears of
commutation value comes to Rs. 300 x 12 x12.66 = Rs.45556/- If had died after 50
months, the arrears paid as monthly difference comes to Rs. 300 x 50 = Rs. 15000/ -
Thus bank has saved Rs. 30556/- plus interest thereon for all these years from the dues
of a deceased pensioner. There may be approx. 100 -120 such cases.
3. The other major portion is of interest that has been paid for 55 months to almost all the
VRS pensioners, which should have been for 125 months from 6-11-2003 - the date of
Judgment of High Court Calcutta in WP No. 624 of 2003 – Manik Kundu & Oth. Vs
Allahabad Bank & oth. Saving of interest for 70 months.
18
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
4. Order was to pay interest till the date of payment of arrears. Arrears were paid on 24-4-
2014 (Important Date in Bank’s History) and as is the objective of the banking business,
these officers have by not paying interest for 24 days saved further amount of Rs.5.83
lacs for Bank.
It has surfaced by obtaining the information under RTI that in the year 2009 after the
Judgment dated 27-03-2009, by Supreme Court in Case of Bank of India vs K.Mohandas,
the same officer has in a note-sheet mentioned that Bank will be required to pay
difference of commutation and payment of interest on arrears. The scan copy of
comments is given hereunder –
But now by a different interpretation the dues of the VRS pensioners have been curtailed,
to save huge amount for Bank. The officer must have been rewarded for his application of
mind.
However it is surprising to note that why he failed to put the position of payment to
arrears of Reg. 29(5) to pensioner of second option in a manner that would have
saved much more funds, if analyzed as under-
1. The VRS retires who opted for pension in second option were neither covered by Pension
Regulation 1995 in 2001 at the time of their retirement nor at the time of Supreme Court
judgment darted 27-3- 2009 or at the time of IBA circular dated 16-08-2009. Thus there
was no question of their dues remaining unpaid as on the date of IBA circular. Hon’ble
Supreme Court has ordered for interest payment because despite the circular of IBA Bank
did no pay the dues of Reg.29 (5) to the eligible VRS pensioners. The second pension
optees were not at all eligible for that amount on that date; hence no interest was to be
paid to them.
2. The judgment by Supreme Court dated 27-3-2009 in case of Bank of India Vs K.
Mohandas, has been applied in present order dated 13-02-2014.
Quote – “In our opinion, the issue involved in all these appeals is squarely covered by
the judgment of this Court in K. Mohandas and others (supra). Consequently, all the
appeals filed by the Banks are dismissed.”
From the decision dated 27-3-2009 following facts emerge-
Quote from judgment dated 27-3-2009 – Para 40 “It was submitted on behalf
of the banks that amendment to Regulation 28 has neither been challenged nor the said
Regulation has been declared ultra vires and, therefore, that provision cannot be
rendered otiose by taking recourse to Regulations 29. It is true that validity and legality
of Regulation 28 has not been put in issue. It was apparently not done because,
19
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
according to the employees, amended Regulation 28 although made retrospective could
not have affected the concluded contract.
Quote from judgment dated 27-3-2009 – Para 53 “We hold, as it must be, that
the employees who had completed 20 years of service and were pension optees and
offered voluntary retirement under VRS 2000 and whose offers were accepted by the
banks are entitled to addition of five years of notional service in calculating the length of
service for the purposes of that Scheme as per Regulation 29(5) of the Pension
Regulations, 1995.
The VRS retirees with CPF, did not have any contract relating to pension on the
date of acceptance of their VRS application by the Bank, as the contract for pension is
pre-requisite as per above judgment.
Further the Supreme Court has decided the applicability of Reg.29 (5) to those retirees’
only who were pension optees on that date.
With above analysis the VRS retirees who opted pension in second option; were
well aware of applicability of amended Reg.28 to them, were not under any
contract for pension and were not pension optees at the time of their retirement
when the contract of VRS concluded, they could have been put out of ambit of
the orders dated 27-3-2009 and 13-02-2014 of Supreme Court, and Bank could
have not paid arrears of Rs. 273.03 lacs to 339 such pensioners. This is another
angle.
S.K.MISHRA – BHOPAL – 27-06-2014
**************
20
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Hon’ble Union Finance Minister/ Bhopal – Date 21-6-2014
Hon’ble Union Law Minister
Govt. of India, New Delhi
Subject- Injustice with Pensioners of Public Sector Banks by
IBA in Bipartite Settlements
The Salary and wages of public sector/ nationalized Banks are periodically revised
for a block period of five years generally through Bipartite Settlements between
representative of unions/organizations of employees and Indian Bank Association
representing the Banks.
Prior to Oct 1993, there was no pension scheme to the Bank employees and they
were being given CPF. During the year 1993 pension scheme was introduced in these
banks and employees were offered to exercise their options for the pension that
replaced the CPF. The pension rules were framed and introduced in the public sector/
nationalized Banks.
After the introduction of the said pension scheme, the representative
unions/organizations of employees and Indian Bank Association representing the Banks,
without giving any chance of representation or suggestions by the retirees/pensioners,
changed the pension eligibility of the pensioners in these Bipartite Settlements that
almost every time adversely affected the pension benefits of the
retirees/pensioners of the Settlement Block Periods.
The Bipartite Settlements are said to be for improvement and benefit to the
employees, but if analyzed with the angle of benefits to retirees in these settlements
the fact is otherwise as under –
In 5th Bipartite Settlement
Difference of Gratuity on Revised Pay Denied to retirees
In 6th Bipartite
Date of benefit of increased pension extended to bring loss to 5000
pensioners
In 7th Bipartite Settlement
(a) Lower Pension to retirees numbering approx 100000
(b) Notional addition of service denied to approx 80000 pensioners
In 8th Bipartite Settlement
(a) Arrears of Pension & Eligible Commutation Denied
(b) Benefit of improvement in DA formula denied to 1.5 lac pensioners
In 9th Bipartite Settlement –
Extra financial load on Retirees opted for pension in second option.
The details of above matters are given in Annexure enclosed herewith.
From the above history and track record, it is evident of the fact that the
pensioners who have no representation in these Settlements have always been put to
loss by IBA and representatives of the employees’ unions. Aggrieved by such various
type of curtailments in pension benefits many pensioners have to per force follow the
legal route and I would like to reproduced here some of the glaring comments of
Hon’ble Judges in the matter as under-
21
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
1. The High court of Karnataka in WA No 1758-1785 of 2003 decided the matter of
difference of gratuity of pre-1994 retirees on 25-5-2012 in favour of the retirees. Here
Hon’ble Mr. Vikramjit Sen, Chief Justice has commented in his order at page No 29 as
under-
“It does not require a paranoid mind to suspect that the Unions or
Associations were not as receptive or assiduously loyal to the cause of the
older employees as were of officers and employees in harness.”
Further while recording the final order the judge has written this also-
2. “The numbers of pensioners have dwindled over the years; their demise has
liberated them from their relative penury”
3. In Writ Petition No. OP 37198 of 2001(C) decided by The High Court of Kerala
against Canara Bank on 31-08-2010 following was the ruling of the Court –
“7.Memorandum of Understanding cannot meddle with the statutory
prescriptions. Nobody can agree by way of a settlement at the behest of an
organization taking away the benefit conferred on individuals by way of
statutes or statutory rules.”
But still the IBA and representative unions of working employees continued to negotiate
and decide the pension benefits of the retirees, and in the process brought losses to
pensioners.
The result had been that many a retirees and pensioners have filed Writ Petitions and
hundreds of such cases had remained pending in court of law for many a years. Banks and
IBA has taken advantage of the work load on judiciary for delaying the payment of
legitimate dues of pensioners as in most of the cases the orders of the courts had been in
favour of the pensioners. The tendency of the Banks on this score is ever increasing for
delaying the due payments with sole intention to earn out of the funds so kept unpaid for
years together.
This type of litigation is while taking precious time of judiciary, public money have been and
being spent by Banks un-necessarily. The matters are related to pensioners /retirees where
High Courts have decided the matters in favour of pensioners. But Banks have filed and are
filing appeals in Supreme Court.
The Central Government has issued guidelines for Government Departments and Public
Sector Undertakings not to indulge in unnecessary litigation. Chapter V Para D Sub-Para b
of the National Litigation Policy specifically restricts the filing of appeals against decisions
relating to pension and retirement benefits. Despite above National Litigation policy
Banks/IBA are filing appeals against decisions relating to pension and retirement benefits
and thus a large number of appeals are pending in various High Courts and Supreme
Court.
It is therefore requested that your office would kindly intervene in the matter for
resolving at least following two issues of Bank Pensioners under litigation pending for
around 20 years-
1. Difference of Gratuity on Revised Pay Denied to retirees who had retired
between 1-7-1993 to 31-10-1194 and the cases are pending In Supreme Court as
22
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Special Leave Petition (Civil) 28332 -28362 Of 2012 BY IBA .Vs. Y.R.SHENOY &
ORS
2. Initial Lower Pension fitment to retirees of the period from 1-4-1998 to 31-
10-2002 and the cases are pending In Supreme Court as Civil Appeal No 5525 of
2012 of Bank of Baroda & another Vs G.Palani & Others
It is also requested that your office would kindly also issue directions to the Banks
and IBA for -
a. Giving representations to retirees and pensioners associations in bilateral talks
related pension and retirement benefits of Bank Pensioners and
b. Avoiding un-necessary litigation in terms of National Litigation Policy in pension
matters
Yours Faithfully
S.K.Mishra – 130- B, Rajat Vihar Colony, Hoshangabad Road, Bhopal (M.P.) 462026
Copy to –
1. Director of Public Grievances
2. The Joint Secretary (Banking)
Ministry Of Finance, Department of Economic Affairs,
Banking Division, Jeevan Deep Building,
Parliament Street, New Delhi – 1
With a request to kindly look into the matter so that un-necessary litigations are avoided.
**************
23
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
To, The General Secretary- AIBPARC & General Secretary -AIBRF
Subject- Issue of Pension Updating taken up by Associations
Options Suggested for Updating
In communications of the pensioners associations, following developments in respect
of demands of pensioners, have been advised –
1. After discussion, IBA informed that they are inclined to favorably consider the demand of
100% DA on pension for pre-Nov. 2002 retirees.
2. IBA further informed that cost aspect on improvement in family pension is being worked
out and they would soon take a decision on the same. IBA responded positively on this
issue.
3. As regards updation of pension, IBA informed that in view of the high cost involved, it
would be difficult to agree to the same. On our insistence, IBA agreed that any viable
and affordable proposition from the UFBU in this regard would be examined.
The Pay Revision for the period from 1-11-2012 to 31-10-2017 is being done by
merger of DA at 4440 CPI, which brings up the Basic pay at 160.15% and further
increase, which at present is said to be offered by IBA at 1.5%, if increased to 4% will
upward revise the Basic Pay Scales at approx 166% of the Pay Scales of 2007-12.The DA
formula will thus get changed to say 0.1% in place of 0.15%.
It is expected that by updating the pension of pre - Nov-2012 retirees, the Notional
Basic Pay of these retirees will be brought to the level of 4440 CPI with common uniform
DA formula as above.
If updating of Pension, is thought on above lines, it is most likely that it will be done
on the formula applied for improvement of Family Pension to RBI pensioners. It aims at
notionally increasing the Basic Pay/Pension in proportion of increase of CPI over the
period of past settlements. This results in bringing the Basic Pension at 4440 CPI by
multiplying the present Basic Pension by respective Number as under for different Block
Period Pensioners-
Present Revision At CPI 4440
Number of Times’ Increase In CPI Over The Block Periods
CPI Of Past Revisions & Increase By …Times’ Formula
CPI Over Block Increased By Times’ Multiply by 4440/Base CPI
332 1986-87 13.373 4440/332 =
600 1987-92 7.400 4440/600 =
1148 1992-98 3.868 4440/1148 =
1684 1998-02 2.637 4440/1684 =
2288 2002-07 1.941 4440/2288 =
2836 2007-12 1.566 4440/2836 =
The above formula of bringing Basic Pension at 4440 CPI does not include the effect of
increases given after merger of DA in past salary revisions.
Effect of Increase given in past settlements-
In past pay revisions after merger of certain DA slabs the increase in pay were given to
form the revised Pay Scales. The increase of proposed pay scale for 2012-17, over the
respective block periods had been calculated and the increase is reflected as under for
three categories of Bank employees-
24
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Times Increase In Basic Pay Over The Pay of Block Times
Increase In
Effect of
Increase
Taken for
Pay for Times’ Increase In Pay Of Avg. Incre. In
Pay Scale = A
Block Sub-Staff Clerks Officers CPI = B = A / B Calculation
1986-87 22.3690 20.0150 19.3010 20.5617 13.373 53.75% 50.00%
1987-92 11.5950 11.2230 10.7840 11.2007 7.400 51.36% 50.00%
1992-98 5.6377 5.6120 5.3350 5.5282 3.868 42.94% 43.00%
1998-02 3.5364 3.5190 3.3450 3.4668 2.637 31.49% 34.00%
2002-07 2.3660 2.3870 2.3580 2.3703 1.941 22.15% 22.00%
2007-12 1.6341 1.6341 1.6341 1.6341 1.566 2.04% 2.04%
As the formula of bringing Basic Pension at 4440 CPI does not include the effect of above
increases the multiplying factors will have to be increased by above corresponding
percentages for giving the effect of increase in Pay Revision of Past Settlements. This
logic of multiplication factor was applied for Central Govt.Pensioners.
The concept of multiplication factor was adopted in Sixth Pay Commission for
Pension Revision of Central Govt. Pensioners. The recommendation and accepted version
is reproduced here under -
Recommendation- All past pensioners should be allowed fitment benefit equal to 40%
of the pension excluding the effect of merger of 50% dearness allowance/dearness relief
as pension (in respect of pensioners retiring on or after 1/4/2004) and dearness pension
(for other pensioners) respectively. The increase will be allowed by subsuming the effect
of conversion of 50% of dearness relief/dearness allowance as dearness pension/dearness
pay. Consequently, dearness relief at the rate of 74% on pension (excluding the effect of
merger) has been taken for the purposes of computing revised pension as on 1/1/2006.
This is consistent with the fitment benefit being allowed in case of the existing employees.
The fixation of pension will be subject to the provision that the revised pension, in no
case, shall be lower than fifty percent of the sum of the minimum of the pay in the pay
band and the grade pay thereon corresponding to the pre-revised pay scale from which
the pensioner had retired. (5.1.47)
Accepted – Accepted with the modification that fixation of pension shall be base on a
multiplication factor of 1.86, i.e. basic pension +Dearness Pension (wherever applicable)
+ dearness relief of 24% as on 1.1.2006, instead of 1.74.
Circular No. is - 38/37/08-P&PW(A) dated 01.09.2008
In view of the above, as IBA has asked for viable and affordable proposition from
the UFBU in respect of pension updation, the figures of increase in pension cost of
pre-Nov 2012, retirees have calculated and the summary is as under-
1. Increased Cost of 100% DA Neutralization to pre- 2002 retired pensioners –
In the month of March 2014 increased cost is calculated to be Rs.25.137 Crores P.M. for
such approx.80300 surviving pensioners, retired up to 31-10-2002.
2. Increased cost of updating the pension as per formula adopted for RBI ( Multiplying by a
number derived = 4440 / Base CPI of concerned pay revision) and increased by the
percentage as given in the table –
25
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Retirees of Period Formula for updating pension Viable
From To Multiply by 4440/Base CPI Increase By - A Increase by 50% of A
1-Jan-86 31-Oct-87 4440/332 = 13.373 50.00% 25.00%
1-Nov-87 31-Oct-92 4440/600 =7.400 50.00% 25.00%
1-Nov-92 31-Mar-98 4440/1148 = 3.868 43.00% 21.50%
1-Apr-98 31-Oct-02 4440/1684 = 2.637 34.00% 17.00%
1-Nov-02 31-Oct-07 4440/2288 = 1.941 22.00% 11.00%
1-Nov-07 31-Oct-12 4440/2836 = 1.566 6.00% 3.00%
a) In the month of March 2014 increased cost of pension for such approx.187000
surviving pensioners, retired up to 31-10-2012.is calculated to be Rs.119.58 Crores
P.M. if increase as per “A “is given. This cost is said to be high by IBA.
b) Therefore viable and affordable proposal may be by reducing the incremental percentage
to half of “A” applicable for all block periods. Thus increased cost of pension is calculated
to be Rs.72.93 Crores P.M. in March 2014 for pre-Nov 2012 retired & surviving
pensioners.
Important points to be noted -
1. It may be noted that in above pension revision, the point of 100% DA neutralization to
pre -2002 retired pensioners is automatically covered. Thus Banks are to bear Rs.72.93
less Rs.25.14 = Rs.49.79 crores over and above the DA neutralization cost, for pension
updating at 50% of actual needed.
2. The Actuarial Valuation of pension liabilities of 24 Nationalized banks as on March 2014
was Rs. 113545.62 crores (Estimated Rs.54488.20 Crores for pensioners and balance for
employees covered under Pension Reg.1995) The increased cost of pension as above for
pension updating, being Rs.72.93 crores P.M. in March 2014 will call for additional
actuarial valuation of pension liability of Rs.6590 crores approx. In the year 2011, when
Second Pension Option was given to approx 272000 Employees & Retirees, the increase
in Actuarial Valuation as per Balance Sheets of these Bank was to the tune of
Rs.24258.03 crores, This increase was to be amortized in next four years as permitted
by RBI vide circular letter No. DBOD.BP.BC.80/21.04.018/2010-11 dated 09-02-2011
and Banks have quite comfortably absorbed to the tune of 80% of the same by March
2014. Thus the additional of Rs.6590 crores is very much affordable by these Banks now.
Note- The data derived & calculated is based on information available on various sites of
Bank Retirees Associations, Banks and IBA. The calculations so done for pension
payments by Banks in the year 2013-14 is tallying with the figures available in Balance
Sheets of all 24 Nationalized Banks. Total Pension paid by these Banks for 2013-14 was
Rs.7235.18 crores and the amount of payment calculated came to Rs.7240.38 crores.
Thus it can be relied upon. Please refer the tables given here under.
This is being written for facilitating help you in discussions with UFBU in the matter of
Pension Updating of Bank Pensioners. Present Basic Pension and Total Gross Pension In
March 2014 for three categories of pensioners of all previous block periods has been
calculated by above revision options and is given hereunder. Calculations in excel sheet is
also attached, that includes calculations for pension updating to be at PAR also.
26
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
BY BRINGING BASIC PENSION AT 4440 CPI & DA
@ 0.1% ON REMAINING 265 SLABS
BY RBI FORMULA Basic Pension Total Gross Pension
Retd.From To Sub Clerks Off Sub Clerks Off
1-Jan-86 31-Oct-87 6050 12101 18580 7653.25 15307.77 23503.70
1-Nov-87 31-Oct-92 6549 12358 18685 8284.49 15632.87 23636.53
1-Nov-92 31-Mar-98 7194 12899 19725 9100.41 16317.24 24952.13
1-Apr-98 31-Oct-02 7712 14343 21277 9755.68 18143.90 26915.41
1-Nov-02 31-Oct-07 8907 16078 23423 11267.36 20338.67 29630.10
1-Nov-07 31-Oct-12 10803 18709 28181 13665.80 23666.89 35648.97
BY BRINGING BASIC PENSION AT 4440 CPI & INCREASED BY %AGE AS BELOW
REVISED POSITION -A Basic Pension Total Gross Pension Increased
Retd.From To Sub Clerks Off Sub Clerks Off By
1-Jan-86 31-Oct-87 9075 18151 27870 11479.88 22961.02 35255.55 50.00%
1-Nov-87 31-Oct-92 9824 18537 28028 12427.36 23449.31 35455.42 50.00%
1-Nov-92 31-Mar-98 10287 18445 28206 13013.06 23332.93 35680.59 43.00%
1-Apr-98 31-Oct-02 10334 19220 28511 13072.51 24313.30 36066.42 34.00%
1-Nov-02 31-Oct-07 10867 19615 28576 13746.76 24812.98 36148.64 22.00%
1-Nov-07 31-Oct-12 11451 19831 29872 14485.52 25086.22 37788.08 6.00%
BY BRINGING BASIC PENSION AT 4440 CPI & INCREASED BY %AGE AS BELOW
REVISED POSITION -B Basic Pension Total Gross Pension Increased
Retd.From To Sub Clerks Off Sub Clerks Off By
1-Jan-86 31-Oct-87 7563 15126 23225 9567.20 19134.39 29379.63 25.00%
1-Nov-87 31-Oct-92 8187 15448 23357 10356.56 19541.72 29546.61 25.00%
1-Nov-92 31-Mar-98 8740 15672 23966 11056.10 19825.08 30316.99 21.50%
1-Apr-98 31-Oct-02 9023 16782 24894 11414.10 21229.23 31490.91 17.00%
1-Nov-02 31-Oct-07 9887 17846 25999 12507.06 22575.19 32888.74 11.00%
1-Nov-07 31-Oct-12 11127 19270 29026 14075.66 24376.55 36717.89 3.00%
WORKING ON THE 100% DA FOR ALL RETIREES PRIOR TO 01.11.2002 AND UPDATION OF PENSION FOR ALL RETIREES UPTO 31.10.2007 RETIREES
DURING THE PERIOD 01.11.1987 TO 31.10.1992
Basic Pay Basic Pension Pens. + DA If 100% DA is paid
50% Updation Pension + DA
40% Updation Pension + DA
1670 835 6581 6581 10680 8544
3220 1610 12244 12688 19148 14773
4520 2260 15765 17359 24594 19675
5050 2525 16493 19394 27572 22058
5650 2825 17316 21698 32508 26007
7000 3500 19170 26883 44252 35402
RETIREES DURING THE PERIOD 01.11.1992 TO 31.10.1997
6420 3210 12777 13209 19148 15318
9200 4600 16597 18929 25274 20220
10450 5225 17723 21501 30806 24645
12650 6325 19704 26027 39827 31861
14000 7000 20920 28805 44252 35402
27
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
RETIREES DURING THE PERIOD 01.11.1997 TO 31.10.2002
5850 2925 8232 8232 11361 11361
10880 5440 14739 15310 19828 15863
14240 7120 17566 20038 25275 20220
15760 7880 18671 22177 28338 22671
17280 8640 19776 24316 33444 26755
21300 10650 22698 29973 44252 35402
PENSION & REVISED PENSION IN MARCH 2014
EXISTING POSITION Basic Pension Total Gross Pension
Retd.From To Sub Clerks Off Sub Clerks Off
1-Jan-86 31-Oct-87 635 1270 1950 5846.76 11664.13 16925.63
1-Nov-87 31-Oct-92 885 1670 2525 8148.64 14759.13 19185.61
1-Nov-92 31-Mar-98 1860 3335 5100 8942.88 15424.31 20255.84
1-Apr-98 31-Oct-02 2925 5440 8070 9622.08 17174.20 21796.15
1-Nov-02 31-Oct-07 4590 8285 12070 11224.39 20260.14 29515.98
1-Nov-07 31-Oct-12 6900 11950 18000 13793.10 23888.05 35982.00
Data of Pension Liability Valuations On March 2011 - March 2013 AND March 2014
Name of Bank Liab.11 Paid-11 Liab-13 Paid -14 Liab-14
Allahabad Bank 2578.78 141.27 3697.49 243.27 4143.65
Andhra Bank 2084.06 106.95 2834.32 157.54 3180.74
Bank of Baroda 6645.04 199.63 7502.04 502.76 8259.48
Bank of India 6892.06 345.42 7404.65 605.48 8038.24
Bank of Maharashtra 2156.79 107.8 2772.84 207.40 3216.27
Canara Bank 7175.38 373.15 8584.93 596.28 9035.86
Central Bank of India 5997.12 279.44 7190.56 578.07 8139.02
Corporation Bank 1671.9 52.01 2148.55 77.00 2473.20
Dena Bank 1007.03 193.22 1761.94 190.88 1917.94
Indian Bank 3563.00 191.82 4521.26 318.32 4930.31
Indian Overseas Bank 3863.32 222.01 4865.10 397.65 5426.49
Oriental Bank of Commerce 2509.83 52.53 3342.17 91.14 3832.78
Punjab & Sind Bank 2350.23 105.53 2419.87 174.73 2493.33
Punjab National Bank 10590.72 368.07 13559.18 652.83 15162.79
State Bank of Bikaner & Jaipur 1913.19 122.37 2335.53 154.01 2694.25
State Bank of Hyderabad 1719.94 95.21 2588.59 167.48 2892.51
State Bank of Mysore 1232.79 69.16 1152.24 104.17 1323.29
State Bank of Patiala 1895.87 75.05 2252.73 109.17 2480.48
State Bank of Travancore 1434.91 80.50 2216.64 125.44 2235.53
Syndicate Bank 5701.55 266.45 4550.04 466.09 5048.83
UCO Bank 3066.66 276.45 3863.62 413.28 4655.28
Union Bank of India 4771.82 306.64 5991.02 380.68 6683.81
United Bank of India 1861.99 65.95 2317.55 301.79 3148.70
Vijaya Bank 1832.94 102.84 2009.65 219.72 2132.84
Total 84516.92 4199.47 101882.51 7235.18 113545.62
S.K.MISHRA - BHOPAL- 28-10-2014
**************
28
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Dear Friends,
One Rank One Pension & Cost of Updating Pension of Bank Pensioners
The concept of one rank one pay has been often discussed in circle of bank pensioners more
particularly after the decision for armed forces. We are to understand the subject before
going for any conclusion or demand. It is in brief advised as under-
WHAT IS OROP?
“One Rank, One Pension” is the demand for the same pension for the same rank and
for the same length of service, irrespective of the date of retirement.
How is pension rate determined currently?
Currently, the pension of retired personnel depends on the Pay Commission
recommendations at the time of retirement. So a pensioner, who retired before the Pay
Commission of 2006 came into effect, draws less pension than a junior pensioner, who
retired after 2006, even if both of them served at the same rank for the same duration.
How are the armed forces affected?
Unlike civil servants who retire at the age of 60, most soldiers are compulsorily retired
between the age of 35 and 37. Moreover, military personnel can be discharged anytime on
the grounds of disability, unlike civil servants. Thus, soldiers are dependent on their pension
for a longer duration and are affected the most if pension is not revised with each pay
commission.
Government has announced one-rank one-pension for ex-servicemen on 05/09/2015:
UNDER THE OROP SCHEME:
The benefit will be given with effect from 1st July, 2014.
The present government assumed office on 26th May, 2014 and therefore, it has been
decided to make the scheme effective from a date immediately after.
Arrears will be paid in four half-yearly instalments. All widows, including war widows, will be
paid arrears in one instalment.
To begin with, OROP would be fixed on the basis of calendar year 2013.
Pension will be re-fixed for all pensioners retiring in the same rank and with the same length
of service as the average of minimum and maximum pension in 2013. Those drawing
pensions above the average will be protected.
It is estimated that the expenditure on arrears alone would be ten to twelve thousand crores
of rupees.
PENSION UPDATION OF BANK PENSIONERS:
If you go through OROP demand of Military Personnel carefully, our demand for
UPDATION OF PENSION is also same and similar. In the case of Central Government
Pensioners, budgetary provisions are made, whereas in our case, we are getting our pension
on surrendering CPF benefit.
The said Fund In banks is called PENSION FUND, which is to be wisely invested and
earn on such investments.
29
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Name of Banks PVO& Pension Paid as Shown in Balance Sheet of 2014 & 2015
PVO as on Pension Paid for PVO as on Pension Paid for
March 2014 2013-2014 March 2015 2014-2015
Allahabad Bank 4143.72 243.27 4582.02 297.29
Andhra Bank 3180.72 157.54 3749.44 197.50
Bank of Baroda 8259.53 502.76 8949.66 617.01
Bank of India 8038.33 605.48 9420.03 712.15
Bank of Maharashtra 3216.32 207.4 3729.84 246.19
Canara Bank 9035.90 596.28 9633.14 660.39
Central Bank of India 8139.06 578.07 9713.80 682.27
Corporation Bank 2473.25 77.00 2779.59 104.45
Dena Bank 1917.96 190.88 2158.66 214.78
Indian Bank 4930.31 318.32 5306.22 373.23
Indian Overseas Bank 5426.57 397.65 6007.72 423.11
Oriental Bank of Commerce 3832.83 91.14 4323.04 112.7
Punjab & Sind Bank 2493.35 174.73 2537.12 216.8
Punjab National Bank 15162.94 652.83 18217.40 821.16
State Bank of Bikaner & Jaipur 2694.34 154.01 2661.64 181.21
State Bank of Hyderabad 2892.56 167.48 3483.45 189.52
State Bank of Mysore 1323.28 104.17 1584.66 136.84
State Bank of Patiala 2480.49 109.17 2677.68 140.47
State Bank of Travancore 2235.52 125.44 2506.07 151.59
Syndicate Bank 5048.84 466.09 5360.18 546.18
UCO Bank 4655.37 413.28 5293.58 491.61
Union Bank of India 6683.93 380.68 8218.73 452.00
United Bank of India 3148.79 301.79 3543.16 346.06
Vijaya Bank 2132.84 219.72 2407.14 218.99
ALL P.S BANKS 113546.8 7235.18 128843.97 8533.50
On the basis of the PVO of 24 Banks at Rs.113546 crores as on 31-3-2014, there were
many discussions in the matter that the same is sufficient to cover future pension payments
and can meet the increased pension payments of pension updating also. The PVO as on 31-
3-2015 increased to Rs.128844 crores as is reflected in Audit Reports.
The PVO (Present Value of Future Obligations) is actuarial valuation of pension
liability, calculated on the basis of certain data (viz- No of employees covered under
pension, No of Surviving Pensioners, Future Increase in DA, average age of the employees &
also of pensioners and some more factors) as on year ended March every year. As the data
changes every year for obvious reasons of changes in number of surviving pensioner, new
30
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
retirees, increase in DA etc, the PVO gets changed and based on these factors, for the
changed valued liability, banks are to meet the gap.
As per trend from 1995 onward banks had to contribute much on these and as we are
aware that for second pension option the PVO for 24 Banks increased by Rs.28821 crores in
the year 2011 and Banks had to contribute for the same in 5 years in phases as permitted by
RBI.
With increase in salary and other factors the PVO is on increasing trend. The most
important factors are DA Increase & yield on Pension Funds.
With an estimate as on March-2015 for above 24 banks, there are approx. 268000
pensioners & approx. 59000 family pensioners (Surviving as against total approx 341000
retired from 01/01/1986 with Pension Option. Pre-86 retired surviving pensioners are
approx. 4000 and family pensioners are approx 8000. As we know that pension is eligible
only to the employees appointed till 31/03/2010, the number of such pension covered
employees is approx. 385000 as on 31/03/2015. Thus number under pension, including
covered employees, is fixed and cannot increase, rather will go on reducing with deaths of
covered pensioners / employees.
For updating of pension to surviving pensioners the estimated load is worked out to be
approx.1500 crores per annum as on March-2015 for all pensioners of above 24 Banks.
S.K.Mishra – Bhopal – 25-10-2015
**************
31
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Dear Shri- Bishwabandhhu- Patron, Bhopal – 10-12-2015
Shri Dogra - Vice President
Shri Sudhir Verma - General Secretary
All India Allahabad Bank Pensioners & Retirees Association
Subject - Sufficiency of Pension Funds for Updating Pension - AIBOC View
AIBOC in letter No. 2015/ 123 dated 13.11.2015 addressed to Chairman of I.B.A. has
written as under -
“While on several aspects of pension improvement, IBA has been repeatedly
forwarding the plea of cost burden but at no point of time during negotiations, authentic data
has been presented in support of its contention. On the contrary, authentic pension fund data
categorically reveals that as on 31.03.2014, the corpus of Pension Fund stood at about Rs.
1,14,000/- crores. More importantly Pension Funds of Banks are in surplus consecutively
over the years and such surplus is growing year by year despite the fact that Banks have
failed to provide for the required sum in pension funds as agreed in Bipartite Settlements.
Under these circumstances, demands of retirees for improvement in Family Pension in line
with RBI, 100% DA neutralization to pre Nov 2002 retirees as also updation of Pension,
cannot be delayed/ denied. “
AIBOC has thus concluded that Pension Funds of the Banks are in surplus
consecutively over the years and such surplus is growing year by year despite the fact that
Banks have failed to provide for the required sum in pension funds.
TREND OF FIGURES OF PVO, INTEREST EARNED & PENSION PAID BY 24 BANKS
FROM 2008 TO 2015 IS AS UNDER -
For Opening Bal Interest Pension Balance Will Reqd.PVO Reqd.addition
Year of PVO (A) Earned (B) Paid (C) Be A + B - C At Year End By Banks
2008 31012.41 2548.90 2025.10 31536.21 34655.90 3119.69
2009 34655.90 2862.80 2439.91 35078.79 46450.60 11371.81
2010 46450.60 3900.30 2870.46 47480.44 60258.89 12778.45
2011 60258.89 5060.03 4199.47 61119.45 84516.92 23397.47
2012 84516.92 6923.24 4469.20 86970.96 94565.33 7594.37
2013 94565.33 7811.69 5610.26 96766.76 101882.51 5115.75
2014 101882.51 8556.93 7235.18 103204.26 113545.62 10341.36
2015 113545.62 9222.68 8533.50 114234.80 128843.67 14608.87
TOTAL 46886.57 37383.08 TOTAL 88327.77
The above figures are drawn from the audited balance sheets & audit reports of 24 Banks.
The PVO is the corpus required to meet the obligation of pension payment for full life period
of the pensioners & employees covered under pension that may retire & will be paid pension
after they retire for their life also.
The study of above Data of PVO from the year 2008 indicates that the Banks have
contributed in pension funds every year and the contribution of the Banks had been to the
tune of Rs. 88300 crores during last 8 years, to meet the PVO assessed being statutory
responsibility/liability at the end of every year in March.
For the year ended March -15, the PVO was assessed to be Rs. 128843.67 for 24
Banks that has shown an increase of Rs.15298.05 crores over the PVO of March -14 that
was at Rs. 113545.62 crores. During the period 2014-15 these banks had paid pension to the
32
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
tune of Rs.8533.50 crores and interest earnings on pension funds were of Rs.9222.68 crores.
Thus Banks had to contribute Rs.14608.87 crores to meet the gap of PVO as of March-15.
With analysis of above data it cannot be said that the Banks have not contributed to
Pension Funds & fund have grown only by the surpluses of interest earning over the amount
of pension paid yearly.
The AIBOC leadership is aware that for the second option of pension to approx 272000
employees, who were under CPF, the PVO was assessed at Rs.17533.80 crores & CPF
balance of these employees was Rs.11532.00 crores and thus gap of Rs.6001.80 crores was
agreed to be met in 70:30 ratio by Banks & employees for second pension option. Thus
leaders of AIBOC are supposed to be in full knowledge of the mechanism of PVO and the
statutory liability of the banks to meet the same by funding it as per Pension Regulations
1995.
By giving an impression that the AIBOC leaders think that pension fund is growing by
surpluses over the years, they will be proved wrong by IBA & thus it will dilute the efforts of
achieving the demand of pension updating & 100% DA neutralization to pre-2002 retirees.
Instead of talking of pension fund, the leaders may plead that the increased cost of
pension updating/ DA neutralization & improvement in family pension is not much. It is
assessed to be at approx.1500 crore per annum as on March 2015 for all existing pensioners,
and is very meager percentage of establishment costs of the banks. Further in the light of
the fact that Banks are writing off the huge sums on account of Large NPA Accounts by way
of compromises & settlements, this amount is just negligible and is affordable within the
present net profits of the Banks.
Further the Associations of Pensioners may on the other hand assess the strength of
the case of filing W.P. for updating the pension on the following basis.
Bank Employees' Pension Regulations, 1995 provide for updating / revision in basic Pension.
In terms of provisions contained in Regulation 35 (1) thereof, the employees retired between
01-01-1986 and 31-10-87 have already been given benefit and their Basic Pension with
Additional Pension was updated on the basis of formula prescribed in Annexure – 1 under
Regulation 35 of Bank Employees' Pension Regulations.
But thereafter with further salary revisions such updating was never done by the
Banks despite above regulation & precedence.
In regard to 100% DA neutralization to pre-2002 retired pensioners, Associations of
Pensioners should become the intervener in the SLP already pending in Supreme Court and
IOB Retirees Association have already become the intervener and admitted by Supreme
Court. The case will certainly be decided in favor of pensioners if pleaded by giving case laws
of following judgments of Supreme Court –
a. D. S. Nakara and Oth Vs Union of India - Writ Petitions Nos. 5939-5941 of
1980 DATE OF JUDGMENT: 17/12/1982
In above case the formula adopted for improvement in quantum of pension was the
issue to be decided as applicable to the existing pensioners, retired prior to the specific date.
On May 25, 1979, Government of India, Ministry of Finance, issued Office
Memorandum No. F-19(3)-EV-79 whereby the formula for computation of pension was
liberalised but made it applicable to Government servants who were in service on March 31,
1979 and retire from service on or after that date (specified date for short). The formula
33
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
introduced a slab system for computation of pension. This liberalised pension formula was
applicable to employees governed by the 1972 Rules retiring on or after the specified date.
Earlier average emoluments of 36 months' service were considered for fixing of
pension .It was amended to be at average emoluments of 10 months service With a view to
giving a higher average emolument. By the liberalised scheme the eligible pension at a
glance would be on the higher side.
The petitioners challenged only that part of scheme by which its benefits were
admissible to those who retired from service after a certain date.
At para 42 of the judgment the court concluded as under-
“If the State considered it necessary to liberalise the pension’s scheme, we find no
rational principle behind it for granting these benefits only to those who retired subsequent
to that date simultaneously denying the same to those two retired prior to that date. If the
liberalisation was considered necessary for augmenting social security in old age to
Government servants then those who retired earlier cannot be worse off than those who
retire later. Therefore this division which classified pensioners into two classes is not based
on any rational principle and if the rational principle is the one of dividing pensioners
otherwise equally placed, it would be discriminatory”
It was concluded by the court that the changed formula adopted for determining last
average emoluments drawn had an impact on the quantum of pension. The change of
formula for determining average emoluments was treated as liberalisation or upward revision
of the existing pension scheme and was allowed to all the existing pensioners, even if retired
prior to the specific date, but benefit was made available from the certain specific date.
b. V. KASTURI Vs. STATE BANK OF INDIA, BOMBAY & ANR.
DATE OF JUDGMENT: 09/10/1998
In this case on parity of reasoning drawn from the case of D.S.Nakara Vs
Union of India, it was held that if a person was eligible for pension at the time of his
retirement and if he survives till the time of subsequent amendment of the relevant
pension scheme, he would become eligible to get enhanced pension or would
become eligible to get more pension as per new formula. Accordingly, he would be
entitled to get similar benefit from the date it is given to other members.
In this case the petitioner had resigned from the Bank service on 31St July, 1984. By
that time he had completed 20 years and 9 months of pensionable service. At the time of his
resignation which was treated as voluntary retirement, he was not entitled to get pension
under the aforesaid Rules as the eligibility requirement for earning pension as per Rule
was to the effect that the employee should have retired from Bank service after 25 years
of pensionable service. However, on account of various representations from the Bank
employees the said eligibility condition was relaxed with effect from 20th September, 1986
whereby the original clause was replaced by another clause which provided that an
employee retiring after completion of 20 years of pensionable service irrespective of the age
could get benefit of the pension scheme by his request in writing.
But bank denied the pension benefit stating that he had retired in 1984 two years
before the change in rule in 1986, thus rule is not applicable to him.
34
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
The denial of the said benefit to the appellant was purely arbitrary and unreasonable
and was not justified on the touchstone of Article 14 of the Constitution of India. He made it
clear that he was not challenging the cutoff date fixed by the respondent authorities while
amending the pension rules. All that he submitted was that as the appellant falls in the
same class of other Bank employees who had completed 20 years of pensionable service by
the time of retirement the appellant was entitled to earn pension from 20th September,
1986 as he had survived on that date, his earlier retirement notwithstanding.
APPLICABILITY OF ABOVE CASES IN 100% DA NEUTRALISATION MATTER
It was concluded by the court that the changed formula adopted for determining last
average emoluments drawn & length of service had an impact on the quantum of
pension. The change of formula was treated as liberalisation or upward revision of the
existing pension scheme and was allowed to all the existing pensioners, The third factor that
impacts the quantum of pension is DA rate. It is also liberalisation or upward revision of the
existing pension scheme
The Supreme Court in Nakarra Case & V.Kasturi case held that the fixing a cutoff
date for being eligible for the improved pension benefits/liberalization of existing
pension scheme, is arbitrary, if the pensioners form a class. Extending the same
reasoning on applicability of the improved formula of DA with 100% neutralization is also
liberalisation of the pension scheme to Bank pensioners as it gives extended benefit in terms
of quantum of pension. The cutoff date (1-11-2002) will be held as division of classified
pensioners into two classes without any rational principle and it will be held discriminatory.
The estimated number of retirees of 24 Banks retired during different settlement
period till March -2015, & surviving pensioners are as under -
Retirees of Period Retired No. Pensioners Survived
Pre -1986 31-Dec-86
4008 1-Jan-86 31-Oct-87 3773 1213 1-Nov-87 31-Oct-92 12555 5522 1-Nov-92 31-Mar-98 20794 12548 1-Apr-98 31-Oct-02 24401 16885 2001-02 VRS 2000 Scheme 79134 62139 1-Nov-02 31-Oct-07 22296 17649 1-Nov-07 31-Oct-12 105304 88764 1-Nov-12 31-Mar-15 72965 63891
Total 341222 272619
The estimated number of surviving family pensioners as on March-2015 is as under-
Families of Retirees of Period Deaths of Retirees Family Pensioners
Pre -1986 31-Dec-86
7506
1-Jan-86 31-Oct-87 2560 1441
1-Nov-87 31-Oct-92 7033 4562
1-Nov-92 31-Mar-98 8246 6213
1-Apr-98 31-Oct-02 7516 6054
2001-02 31-Oct-02 16995 14466
1-Nov-02 31-Oct-07 4647 3978
1-Nov-07 31-Oct-12 16540 14563
1-Nov-12 31-Mar-15 9074 8131
Total 72611 66914
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
ESTIMATED NO. OF PENSIONERS ,PENSION PAID & PVO OF 24 BANKS IN MAR-15
No. of Pensioners PVO Pension
Name of Bank Including Pre -86 Rtd As On Paid
Pensioners Family Mar-15 2014-15
Allahabad Bank 9324 2022 4582.02 297.29
Andhra Bank 5939 1447 3749.44 197.50
Bank of Baroda 19216 4733 8949.66 617.01
Bank of India 23096 5711 9420.03 712.15
Bank of Maharashtra 7742 1893 3729.84 246.19
Canara Bank 22801 5631 9633.14 660.39
Central Bank of India 22071 5438 9713.80 682.27
Corporation Bank 3035 742 2779.59 104.45
Dena Bank 7666 1878 2158.66 214.78
Indian Bank 11855 2904 5306.22 373.23
Indian Overseas Bank 14801 3626 6007.72 423.11
Oriental Bank of Commerce 3645 902 4323.04 112.70
Punjab & Sind Bank 6513 1595 2537.12 216.80
Punjab National Bank 24203 5929 18217.40 821.16
State Bank of Bikaner & Jaipur 5624 1363 2661.34 181.21
State Bank of Hyderabad 6138 1486 3483.45 189.52
State Bank of Mysore 3860 936 1584.66 136.84
State Bank of Patiala 4042 956 2677.68 140.47
State Bank of Travancore 4569 1096 2506.07 151.59
Syndicate Bank 17946 4453 5360.18 546.18
UCO Bank 15174 3736 5293.58 491.61
Union Bank of India 14175 3473 8218.73 452.00
United Bank of India 11103 2978 3543.16 346.06
Vijaya Bank 8081 1986 2407.14 218.99
24 P.S BANKS 272619 66914 128843.67 8533.50
S.K.MISHRA – BHOPAL – 10-12-2015
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36
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Dear Friends, Bhopal 03-02-2016
BANKS PROFITS UNDER PRESSURE FOR THE YEAR 2015-16
Now all the Public Sector Banks might be much busy in exercise that Bank must somehow
show the net profit in financial year 2015-16 ending on 31-03-2016.The NPA figures are very much worrying and are not coming down, eroding a major portion of operating profits in provisioning for the same.The operating profits, provisions & contingencies and net profits
for last three years of 24 P.S. Banks were as under-
Financial Year Operating Profits Provisions & Contingencies Net Profits
2012 - 13 85297.82 50703.32 34595.50
2013 - 14 89841.07 64847.90 24995.17
2014 - 15 93424.98 69599.34 23825.64
The provisions & contingencies for last three years were 59.44%, 72.18% and 74.50% of operating profits. The trend had been increasing & alarming for provisioning required for NPA.
Now while pressure of provisioning for increased NPA is already on these 24 Banks, the requirement of funding /provisioning for increased gratuity & pension liability is also another factor for the year 2015-16, as this year, there was salary revision for Bank employees.
In the year 2011 when salary revision under 9th Bipartite Settlement was done, these Banks were required to make increased provision for gratuity & pension liability to the tune of Rs. Rs.28821.13 crores. Banks approached RBI and Reserve Bank of India had vide circular
No.DBOD.BP.BC.80/21.04.018/2010-11 dated 09-02-2011, permitted all these Banks for amortization of such increased liability in five years.
This time also the increase in pension liability alone is estimated at Rs. 24848.19 crores.
Again the Banks might approach RBI for permitting amortization in five years. If not the net
profits that had come down from Rs.34595 crores in 2013 to Rs.23825 crores in 2015 will
not be covering even the increased pension liability for the year 2016.
TREND OF FIGURES OF PVO, INTEREST EARNED & PENSION PAID BY 24 BANKS FROM 2008 TO 2015 IS AS UNDER – (Estimated for 2016 also given)
For Opening Bal Interest Pension Balance Will Reqd.PVO Reqd.addition
Year of PVO (A) Earned (B) Paid (C) Be A + B - C At Year End By Banks
2008 31012.41 2548.90 2025.10 31536.21 34655.90 3119.69
2009 34655.90 2862.80 2439.91 35078.79 46450.60 11371.81
2010 46450.60 3900.30 2870.46 47480.44 60258.89 12778.45
2011 60258.89 5060.03 4199.47 61119.45 84516.92 23397.47
2012 84516.92 6923.24 4469.20 86970.96 94565.33 7594.37
2013 94565.33 7811.69 5610.26 96766.76 101882.51 5115.75
2014 101882.51 8556.93 7235.18 103204.26 113545.62 10341.36
2015 113545.62 9222.68 8533.50 114234.80 128843.67 14608.87
2016 128843.67 10694.02 13286.52 126251.17 151099.36 24848.19
The above figures upto 2015 are drawn from the audited balance sheets & audit reports of 24 Banks, BUT for 2016, PVO, Interest and Pension Payment with Arrears to 1.11.2012 to 31.5.2015 retired pensioners are estimated one.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
The PVO is the corpus required to meet the obligation of pension payment for full life period of the pensioners & employees covered under pension that may retire & will be paid pension after they retire for their life also.
Bank wise estimates for PVO & pension payments for 2016 are as under-
Name of Actual Interest Total Estimated Increase Funds to Be Net Profit
Bank PVO 2015 8.30% Pen Paid PVO 2016 In PVO Added 2015
Allahabad Bank 4582.02 380.31 463.80 5373.50 791.48 874.97 620.90
Andhra Bank 3749.44 311.20 309.17 4397.10 647.66 645.63 638.44
Bank of Baroda 8949.66 742.82 960.16 10495.58 1545.92 1763.26 3,398.43
Bank of India 9420.03 781.86 1102.57 11047.22 1627.19 1947.90 1,708.92
Bank of Maharashtra 3729.84 309.58 384.41 4374.09 644.25 719.08 450.69
Canara Bank 9633.14 799.55 1012.68 11297.11 1663.97 1877.10 2,702.63
Central Bank of India 9713.80 806.25 1056.64 11391.76 1677.96 1928.35 606.45
Corporation Bank 2779.59 230.71 162.98 3259.78 480.19 412.46 584.26
Dena Bank 2158.66 179.17 324.41 2531.59 372.93 518.17 265.48
Indian Bank 5306.22 440.42 581.88 6222.74 916.52 1057.98 1,005.17
Indian Overseas Bank 6007.72 498.64 651.76 7045.43 1037.71 1190.83 -454.33
Oriental Bank of Commerce 4323.04 358.81 172.92 5069.77 746.73 560.84 777.50
Punjab & Sind Bank 2537.12 210.58 340.64 2975.38 438.26 568.32 121.35
Punjab National Bank 18217.40 1512.04 1293.77 21364.09 3146.69 2928.42 3,061.58
State Bank of Bikaner & Jaipur 2661.34 220.89 284.78 3121.11 459.77 523.66 776.87
State Bank of Hyderabad 3483.45 289.13 295.97 4085.08 601.63 608.47 1,317.13
State Bank of Mysore 1584.66 131.53 216.70 1858.31 273.65 358.82 408.80
State Bank of Patiala 2677.68 222.25 221.89 3140.13 462.45 462.09 362.06
State Bank of Travancore 2506.07 208.00 239.04 2939.02 432.95 463.99 335.53
Syndicate Bank 5360.18 444.89 843.09 6286.09 925.91 1324.11 1,522.93
UCO Bank 5293.58 439.37 772.02 6208.01 914.43 1247.08 1,137.80
Union Bank of India 8218.73 682.15 707.07 9638.38 1419.65 1444.57 1,781.64
United Bank of India 3543.16 294.08 551.33 4155.19 612.03 869.28 256.00
Vijaya Bank 2407.14 199.79 336.84 2822.90 415.76 552.81 439.41
Total for 24 Banks 128843.67 10694.02 13286.52 151099.36 22255.69 24848.19 23,825.64
S.K.MISHRA – BHOPAL – 03-02-2016
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38
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Dear Friends,
SUBJECT - INCREASED LOAD AS ON FEB-2016 ON P.S. BANKS ON GIVING 100% DA NEUTRALISATION TO PRE-02 RETIRED PENSIONERS.
I have estimated the data of eligible pensioners & cost of 100% DA neutralization and
it is given here under-
Based on rationally derived data of Bank employees covered under Pension Regulations 1995, the estimated number of employees retied during different wage
settlement block periods up to 31-10-2002,and surviving as on March-2015 is as under-
Period of Retirement No. Surviving Pensioners Avg Age
From To Retired In Mar-15 In Feb-16 In Feb 2016
1-Jan-86 31-Oct-87 3853 1239 1108 87
1-Nov-87 31-Oct-92 12839 5647 5232 84
1-Nov-92 31-Mar-98 21278 12840 12295 80
1-Apr-98 31-Oct-02 24970 17279 16770 76
2001-02 VRS 2000 80980 63589 62426 70
Total 143920 100594 97831
The above surviving pensioners are calculated by applying the survival rates as per LIC chart applicable for different ages and the same is further estimated as on Feb-2016 also. Total numbers of such employees retied till 31-10-2002 and are surviving as on March-2015 is
estimated to be 97831 as above.
Further based on the rationally acceptable percentages the category-wise surviving
pensioners as on March-2015 are estimated to be as under-
Retirement Period 1986-87 1987-92 1992-98 1998-02 VRS -2000
Sub Staff 248 1073 2311 3024 6995
Clerks 496 2202 4879 6393 15261
Officers 483 2310 5496 7620 40061
Executives 12 62 154 241 1272
Total 1239 5647 12840 17278 63589
The calculations of increased cost of pension to above pensioners are as under-
A. Calculations of average Basic Pension
Avg B.Pay At Retirement 1986-87 87-92 92-98 98-02 VRS-95%
Sub Staff 1270 1770 3720 5850 5560
Clerks 2540 3340 6670 10880 10340
Officers - I to IV 3900 5050 10200 16140 15330
Executives 4800 6250 12350 19340 18370
Avg .Basic Pension 1986-87 87-92 92-98 98-02 VRS-32 Yrs
Sub Staff 635 885 1860 2925 2696
Clerks 1270 1670 3335 5440 5013
Officers - I to IV 1950 2525 5100 8070 7433
Executives 2400 3125 6175 9670 8907
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
B. Calculation of DA Amount Per Slab On Basic Pension at existing tapered rate
DA Per Slab on B.P. (Rs.) 1986-87 87-92 92-98 98-02 VRS
Sub Staff 4.255 5.930 6.510 7.020 6.470
Clerks 8.485 10.685 11.112 12.300 11.446
Officers - I to IV 12.225 13.601 13.930 14.388 14.006
Executives 13.388 14.621 14.898 15.348 14.890
C. Calculation of DA Amount Per Slab On Basic Pension with 100% Neutralization
DA Per Slab on B.P. (Rs.) 1986-87 87-92 92-98 98-02 VRS
DA Rate on 100% Neutralization 0.67% 0.67% 0.35% 0.24% 0.24%
Sub Staff 4.255 5.930 6.510 7.020 6.470
Clerks 8.509 11.189 11.673 13.056 12.031
Officers - I to IV 13.065 16.918 17.850 19.368 17.839
Executives 16.080 20.938 21.613 23.208 21.377
D. Calculation of difference of (Increased ) DA Amount Per Slab per pensioner
Increase/Slab/Staff- (Rs.) 1986-87 87-92 92-98 98-02 VRS
To Sub Staff 0.000 0.000 0.000 0.000 0.000
To Clerks 0.024 0.504 0.561 0.756 0.585
To Officers - I to IV 0.840 3.317 3.920 4.980 3.833
To Executives 2.692 6.317 6.715 7.860 6.487
E. Calculation of difference of (Increased) DA Amount at Feb–16 Slabs for all assuming that DA will increase by 45 Slabs in Aug & 50 Slabs in Feb-17
Avg.Increase In DA Rs. 1986-87 87-92 92-98 98-02 VRS
To Sub Staff 0.00 0.00 0.00 0.00 0.00
To Clerks 34.18 717.86 722.19 871.92 674.93
To Officers - I to IV 1196.44 4724.51 5046.35 5743.60 4421.19
To Executives 3834.31 8997.51 8644.44 9065.20 7481.21
Increased Load PM 1986-87 87-92 92-98 98-02 VRS
Sub Staff - Rs.Lacs 0.00 0.00 0.00 0.00 0.00
Clerks - Rs.Lacs 0.15 14.64 33.74 54.10 101.12
Officers - Rs.Lacs 5.17 101.10 265.54 424.80 1738.76
Executives - Rs. Lacs 0.42 5.22 12.79 21.30 93.44
For All - Rs. Lacs PM 5.74 120.97 312.07 500.20 1933.32
Total P.A. Crores 0.69 14.52 37.45 60.02 232.00
The total increased load is thus calculated at Rs.348.68 crores for thr years 2016-17, for surviving pensioners of all above five retirement periods. Further the increased cost for
increase in DA slabs is calculated to be approx. Rs. 2.44 lacs per slab per month.
S.K.MISHRA – BHOPAL – 25-02-2016
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40
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Dear Friends, BHOPAL 15-7-2016
Subject – WHETHER PENSION FUND CAN ABSORB UPDATING PENSION?
I had sent the e-mail to the retirees of my Bank- Allahabad bank with a view that they
should understand as to how the pension fund are to be created and how the banks have to
contribute in funds to ensure payment of pension to all for their full life?
It necessitated only because in one important meeting some of the leaders have
expressed wrong notion on self sufficiency of present value of funds to meet all future
obligation including pension updating, Improvement in family pension and 100% DA
neutralizations also.
Similar view was expressed by LIC retirees association in case pending in court for
100% DA neutralization. The court has in very hard words commented that LIC retirees
association has forgotten that LIC has contributed and will have to contribute further for
meeting the liability. This case of LIC was transferred to High Court by the Supreme Court
and after that it is again in Supreme Court. Thus the case is being shunted in judiciary.
Still there are and may be difference of opinions. It is always welcome for improvement.
For clarity on the subject, I am giving simple example as under –
If the maturity value of an investment after 7 years is Rs.1996/- the net present value
of it will be Rs.1000/ if interest rate is 10% PA with quarterly rests. This every banker knows
and had been canvassing while in service, stating that you will get double the amount after 7
years. So Rs.1000/- is the net present value of Banks obligation of Rs. 1996/- payable after
7years with interest @10%.
Now if the interest rate is changed the Net Present Value of the same amount of
Rs.1996/ will change. The is the very basic concept that what bank should hold at present to
discharge the future obligation /liability. This is called Net Present Value of future obligation=
NPV of Obligation or PVO = Present Value of Obligation.
Now coming to Valuation of Pension Obligation –
If one pensioner is to get monthly pension of Rs.10000/ with DA increase @5% Per
Annum and he is to survive for 10 more years, what provision bank must make to meet this
obligation?
The simple calculation for tenth years pension will be = 1.20 x (1+5%) ^10 will give
the gross amount of Rs.195467/- . But it is not to be paid today. It is to be paid in tenth
year. So net present value of this Rs.195467/- @ 8% discount (The Interest Bank may earn)
will be = 195467 x (1+8%) ^ (-10) = Rs.90539/-
In this way if net present values of first to tenth year obligations are calculated the
sum total of these 10 figures of NPVs will be the net present value of fund needed by bank to
pay pension to this pensioner for his remaining life of 10 years.
If the rate of interest or DA rate changes next year the calculations are made again at
year end, this time for nine years as one year’s pension is already paid. This is the reason
that every year the Value of Pension Liability/Obligation is calculated for data changing every
year.
41
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
This is in case of only one pensioner. For number of pensioners with different pension
amount, different period of pension payments to each of them, this method of individual
calculation will be very time taking and difficult. Hence for large number of pensioners and
employees covered by pension benefit, the rationale data is taken and assumptions as under
are considered for assessing total present value of obligation of Bank for all of them-
1. Number of pensioners and number of employees as on date of Valuation –31st March
2. Average pension of pensioners and average pay of employees on the date of valuation
with assumed increase in DA rate
3. Average age of the pensioners and average age of the employees as on valuation
date, to calculate the pension payment period.
4. Attrition Rate, Discount Rate on average age for assessing mortality while in service. 5. Longevity & Mortality rate of the group based on IALM ( 2006-08)= Charts for
Longevity in Indian conditions
6. Expected yield on the pension fund based on market condition on date of valuation.
An actuarial valuation is a type of appraisal which requires making economic and
demographic assumptions in order to estimate future liabilities. The assumptions are typically
based on a mix of statistical studies and experienced judgment.
Contribution of Rs. 1.08 lac crores by Banks in Pension Funds during last 9 years
On the point of contribution of by Banks in pension funds during last 10 years, I would like to
give following facts from the history of Salary Revisions-
The chart hereunder gives the increased pension cost accepted and shared by employees’
unions and officers’ association while increase given in pay –
Period Pay Increase Increased Pension Cost Shared by Employees Contributed by Banks
1997-02 12.25% 26.50% 8.25% 18.25%
2002-07 13.25% 30.50% 9.25% 21.25%
2007-12 17.50% 36.00% 13.00% 23.00%
For second option of pension to CPF employee given in 2010 based on valuation of
pension liability for these 2.77 lace employees the deficit was Rs.6000 Crores. This actuarial
valuation was part of MOU, signed by unions/ associations of the employees and officers for
Pay Revision of 2007-12. Under this MOU, the bank employees had contributed 30% of it Rs.
1800 Crores, @ 2.8 Month’s Basic Pay of Nov-2007 as per settlement.
The Salary Revision of 2007-2012 that gave 17.5% increase in pay and second
pension option to 2.77 lac employees increased the Value of Pension Obligation of the Banks
by nearly Rs.29000 Crores and RBI had to permit the banks to amortize the load in five
years.
Data on bank-wise Pension Liability etc for the years 2015-16 is given here under in
table form. The summary for the years 2008 to 2016 is also given.
Hope this will help bankers and retirees to understand the subject.
With best wishes
Sincerely yours
S.K.MISHRA - 15-7-2016 E- Mail address - [email protected]
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Table – 1 Pension Liabilities of 24 Public Sector Banks as on Mar-08 to Mar-16
& Amounts Contributed by Banks (Rs. Crores)
For Opening Bal Interest Pension Balance Be Required Contributed
Year of PVO (A) Costs (B) Paid (C) A + B - C PVO at end By Banks
2008 31012.41 2548.9 2025.1 31536.21 34655.9 3119.69
2009 34655.9 2862.8 2439.91 35078.79 46450.6 11371.81
2010 46450.6 3900.3 2870.46 47480.44 60258.89 12778.45
2011 60258.89 5060.03 4199.47 61119.45 84516.92 23397.47
2012 84516.92 6923.24 4469.2 86970.96 94565.33 7594.37
2013 94565.33 7811.69 5610.26 96766.76 101882.51 5115.75
2014 101882.51 8556.93 7235.18 103204.26 113545.62 10341.36
2015 113545.62 9222.68 8533.5 114234.8 128843.67 14608.87
2016 128843.68 9923.43 12629.95 126137.16 146080.58 19943.42
108271.2
Table – 2 The figures of Actuarial valuations of Pension Liabilities of 24 Public Sector Banks
as on March-16 are reported by the Banks in Annual Report. (Rs. Crores)
Actuarial Valuation of Pension Liability of Banks in March -2016
PVO Mar-15
Current Service
Cost Interest
Costs Pension
Paid 15-16 Actuarial
Gain/Loss PVO
Mar-16
Page No of
Report
Allahabad Bank 4582.02 638.89 329.81 368.99 25.89 5207.62 179
Andhra Bank 3749.44 186.54 292.46 317.43 158.72 4069.73 253
Bank of Baroda 8949.66 1261.12 678.81 928.96 1986.54 11947.17 163
Bank of India 9420.03 1097.46 715.46 1088.7 932.23 11076.48 157
Bank of Maharashtra 3729.84 414.02 274.79 368.31 132.14 4182.48 162
Canara Bank 9633.14 924.32 728.17 1062.0 -249.35 9974.28 198
Central Bank of India 9713.80 90.20 743.14 912.59 1518.49 11153.04 358
Corporation Bank 2779.59 74.87 213.69 210.34 118.1 2975.91 165
Dena Bank 2158.66 228.43 161.01 292.09 225.74 2481.75 221
Indian Bank 5306.22 75.54 404.03 562.05 384.4 5608.14 213
Indian Overseas Bank 6007.72 123.81 443.69 667.94 907.77 6815.05 157
Oriental Bank of Comm. 4323.04 123.56 385.84 187.71 304.91 4949.64 175
Punjab & Sind Bank 2537.12 205.27 190.03 323.64 119.14 2727.92 213
Punjab National Bank 18217.40 476.83 1415.01 1191.77 1262.22 20179.68 405
State Bank of Bi.r & Jaipur 2661.64 52.05 214.53 251.84 202.08 2878.46 229
State Bank of Hyderabad 3483.45 156.84 285.99 279.81 162.85 3809.32 31
State Bank of Mysore 1584.67 300.00 130.54 207.00 17.45 1825.66 138
State Bank of Patiala 2677.68 42.37 218.87 182.83 75.06 2831.15 EST
State Bank of Travancore 2506.07 45.64 204.84 203.30 70.25 2623.50 67
Syndicate Bank 5360.18 513.52 416.61 801.17 264.73 5753.87 220
UCO Bank 5293.58 499.65 393.86 740.57 856.09 6302.61 104
Union Bank of India 8218.43 150.00 638.22 681.00 1293.35 9619.00 248
United Bank of India 3543.16 428.75 263.75 492.54 698.09 4441.21 197
Vijaya Bank 2407.14 208.27 180.28 307.37 113.71 2602.03 119
Total of 24 P.S BANKS 128843.68 8317.95 9923.43 12629.95 11580.6 146035.70
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Note –
1. Annual Report of State Bank of Patiala is not available hence figures are calculated
in line with trends.
2. The Normal assumptions usually taken by actuaries are as under
Discount Increase PA (DA) Attrition Rate Yield on Pension Funds
8.50% 5.0% 1% 8.30%
The weighted average of assumptions taken by actuaries is as under
Discount Increase PA (DA) Attrition Rate Yield on pension funds
8.05% 5.33% 1.04% 8.58%
It is to be noted that major factors effecting PVO valuations are annual increase in
pension payout and rate of yield on pension funds. Higher the rate of yield on Pension
Fund, lower will be the valuation of pension liability, and higher the rate of increase in
pension (DA), higher will be the Pension Liability assessed.
Bank wise details of assumptions considered by actuaries are given hereunder-
Actuarial Assumptions Taken By Actuaries for Actuarial Assumptions Considered Page No of
Valuation of Pension Liability of Bank Discount Increase PA Attrition Yield Report
Allahabad Bank 7.50% 5.50% 1% 7.50% 177
Andhra Bank 8.10% 5.00% 0% 9.00% 257
Bank of Baroda 8.00% 6.00% 2% 8.00% 163
Bank of India 8.06% 5.50% 1% 8.94% 157
Bank of Maharashtra 7.79% 5.50% 0% 8.75% 165
Canara Bank 8.00% 5.50% 2% 9.30% 197
Central Bank of India 8.06% 5.00% 0.50% 8.06% 359
Corporation Bank 7.95% 5.00% 1.35% 8.85% 167
Dena Bank 8.00% 5.00% 0% 9.00% 221
Indian Bank 8.04% 6.00% 1% 9.00% 211
Indian Overseas Bank 7.82% 5.00% 0% 9.00% 160
Oriental Bank of Commerce 8.50% 5.00% 0% 8.87% 177
Punjab & Sind Bank 8.00% 5.00% 1% 8.90% 217
Punjab National Bank 8.17% 5.75% 1% 8.61% 404
State Bank of Bikaner & Jaipur 8.06% 5.00% 8.1% 8.06% 233
State Bank of Hyderabad 8.06% 5.00% 0% 9.00% 32
State Bank of Mysore 8.06% 5.00% 2% 8.00% 140
State Bank of Patiala 8.06% 5.00% 2% 8.00% As above
State Bank of Travancore 8.10% 5.00% 0% 8.10% 68
Syndicate Bank 8.40% 5.00% 0% 8.40% 220
UCO Bank 8.00% 5.25% 0% 8.95% 106
Union Bank of India 8.06% 5.00% 2% 8.06% 248
United Bank of India 8.00% 5.00% 0% 8.90% 197
Vijaya Bank 8.00% 5.50% 1% 9.02% 119
Weighted Average for 24 P.S BANKS 8.05% 5.33% 1.04% 8.58%
S.K.MISHRA – BHOPAL – 15-07-2016
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Dear Friends, Bhopal - 09-02-2017
The Ray of Hope in 100% DA Neutralization Matter
On 01-02-2017; Hon’ble Supreme Court by a very brief order dismissed the appeals of
Bank Pensioners claiming parity of DA formula to pre-2002 retirees, more commonly known
as matter of 100% DA neutralization to these pensioners. Following were the appeals filed by
pensioners against the order of Div. Bench of High Court of Madras-
1. Civil Appeal No.8420 of 2013 filed by A.B. Kasturian & Oths Vs Canara Bank
2. Civil Appeal No.8424 of 2013 filed by C.R. Chandshekharan Vs Indian Overseas Bank
3. Civil Appeal No.8422 of 2013 filed by T.Valwan & oths. Vs Canara Bank
4. Civil Appeals Nos. 3762, 3763 & 3764 of 2014 filed by R.Balakrishna Bhat & oths Vs
Bank Of Baroda & Ors
The appeals filed by the pensioners were heard by Hon’ble Supreme Court and chronology
of the hearing dates is given here under –
PROCEEDINGS IN SUPREME COURT
1. On 16.09.2013- Civil Appeal No.8420 of 2013 filed by A.B. Kasturian & Oths Vs Canara
Bank, was admitted.- Leave granted. Hearing expedited.
It indicated that there existed constitutional or legal issue that was not properly
interpreted in the judgments of Madras High Court.
2. On 28.02.2014-Civil Appeals Nos. 3762, 3763 & 3764 of 2014 filed by R.Balakrishna
Bhat & oths Vs Bank Of Baroda & Ors,were admitted & tagged with above- These
Petitions were called on for hearing today. Leave granted. Tag with C.A. Nos.8420-
8421/2013
3. On 30.04.2014- This is an application for impleadment of the applicant namely, I.O.B.
Retirees' Association rep by its General Secretary. The application is allowed in terms of
the prayer made.
4. On 01.12.2015 - I.A. 3/2015, I.A. 4/2015 in Civil Appeal No.8424/2013
C.R.Chandrasekaran & Ors. Appellant(S) Versus Indian Overseas Bank & ANR.
Respondent(s) (for impleadment as party respondent and office report) The learned
counsel for the applicants in the applications for impleadment submits that in the facts
and circumstances of the case, the applicants may be permitted to be impleaded in the
proceedings. I.A. Nos. 3 and 4 of 2015 are allowed. Cause title be amended accordingly.
5. On 29.06-2016- I.A. 1-2/2015 In Civil Appeal Nos. 8420-8421/2013 - List the
applications along with main matters in the month of January, 2017.
6. 29.08.2016 - I.A. 2/2016 in Civil Appeal No(s). 8422/2013 T.V.Alwan & Ors.
Appellant(S) Versus Canara Bank Rep.By Chairman & Md & Anr. Respondent(s) (For
impleadment and office report) - Issue notice on I.A.2/2016.
7. On 15.09.2016 - I.A. 3-4/2016, I.A. 5-6/2016, I.A. 7&8/2016 in Civil Appeal Nos.8420-
8421/2013- Let reply be filed to applications for impleadment within fifteen days.
I.A.Nos.5-6 are allowed. Let amendment be carried out with respect to I.A.Nos.5-6
within seven days.
8. On 18.10.2016 - As per tracking report service of notice is complete in I.A No. 2/16 in
respect of proposed impleaded respondent but no one has entered appearance on his
behalf. Ld. Counsel for the parties have failed to file the statement of case within the
statutory period. Filing of Statement of Case is not mandatory as per amended Supreme
Court Rules, 2013. Viewed thus, the matter shall be processed for listing before the
Hon'ble Court for further orders.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
9. On 11.11.2016 - I.A. 2/2016 in Civil Appeal No(s). 8422/2013.Office report dated 20th
October, 2016 indicates that the service of notice is complete. Hence, the application for
impleadment of Indian Banks' Association (IBA) as respondent no. 3 is allowed.
10. On 01.02.2017- Heard learned counsel for the parties. We do not see any ground to
interfere with the impugned order(s). The civil appeals are, accordingly, dismissed. No
costs. Pending applications, if any, shall also stand disposed of.
Facts of the disputed matter –
On 28th June, 2005 pursuant to a Bipartite Settlement/joint note dated 2nd June, 2005 the
terms and conditions for payment of dearness relief on basic pension were altered. The
dearness relief to be paid to those who had retired between 1st April, 1998 and 31st
October,2002 was to be calculated on the basis of 4 points rise over 1684 points in the
quarterly average of the All India Average Consumer Price Index for Industrial Workers in the
series 1960=100. This calculation was to be made on a slab system; the rate of dearness
relief as a percentage of basic pension being different for each slab. However, those
employees who retired after 1st May, 2005 were entitled to dearness relief for 4 points rise
over 2288 points of the CPI at the rate of 0.18 per cent of the basic pension. As a result,
those who retired between 1st April, 1998 and 31st October, 2002 were paid less dearness
relief than those who retired after that date.
The neutralisation granted to the pre November 2002 retirees was less than 100 per cent on
some of the slabs, whereas those who retired post November, 2002 were entitled to 100 per
cent neutralisation of the cost of living index. This became the matter of dispute, and matter
reached to the Courts, by way of Writ Petitions.
The issue involved in the petitions was whether an invidious classification can be made
between employees, who retired before 1st November, 2002 and those who retired later
from the Bank, with respect to payment of dearness relief with their pension.
It is undisputed fact that the benefits of 100% DA neutralization will increase the quantum of
pension of employees retired before 1.11.2002.
The decisions of Hon'ble Supreme Court of India, in D.S.Nakara v. Union of India [(1983) 1
SCC 305], and in V.Kasturi v. State Bank of India [(1998) 8 SCC 30] held that by any
change/amendment in formula of computation of pension, increases the quantum of pension,
such amended formula will be treated as liberalized/additional benefit given under the
prevailing pension scheme and it will not be treated as New Pension Scheme. The benefit of
the liberalized formula will be given to all pensioners falling under the prevailing pension
scheme.
The Supreme Court has long back taking into consideration various judgment have clarified
the difference of New Scheme & Liberalized /Additional Benefit and also decided the
applicability of cut-off date as under- (Reference - Judgment by Hon’ble Justice
S.B.Majmudar and Hon’ble Justice M.Jagannadha Rao, Supreme Court in case of V.Kasturi Vs
State Bank of India on October 9, 1998.)
Quote -
Category I
“If the person retiring is eligible for pension at the time of his retirement and if he
survives till the time by subsequent amendment of the relevant pension scheme, he would
become eligible to get enhanced pension or would become eligible to get more pension as
per the new formula of computation of pension subsequently brought into force. He would be
entitled to get the benefit of the amended pension provision from the date of such
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
order as he would be a member of the very same class of pensioners when the additional
benefit is being conferred on all of them. In such a situation the additional benefit available
to the same class of pensioners cannot be denied to him on the ground that he had retired
prior to the date on which the aforesaid additional benefit was conferred on all the members
of the same class of pensioners who had survived by the time the scheme granting additional
benefit to these pensioners came into force. The line of decisions tracing their roots to the
ratio of Nakara’s case would cover this category of cases.”
Thus based on above ruling of apex court of the country, the improved formula that gives
100% DA neutralization should have been given to all the Bank Pensioners, which was
denied by Public Sector Banks.
HISTORY OF LITAGATION IN THE MATTER
SINGLE BENCH OF MADRAS HIGH COURT
Some of the aggrieved pensioners filed Writ petitions in Madras High Court against Canara
Bank, Bank of Baroda & Indian Overseas Bank.
A Single Bench of Madras Court taking into consideration the Judgment by Hon’ble Supreme
Court in case of V.Kasturi Vs State Bank of India held that improved formula of 100% DA
neutralization is additional benefit and not the new pension scheme; hence it would extend
even to the employees who retired before 1.11.2002. On 14.12.2012 single judge of Madras
High Court passed order that petitioners who retired prior to 01.11.2002 are also eligible for
100% neutralization in Dearness Relief as this liberalized benefit is granted to pensioners
who retired on or after 01.11.2002.
DIVISION BENCH OF MADRAS HIGH COURT REVERSED THE SINGLE BENCH
JUGDMENT ORDER
Aggrieved by decision OF Div Bench – Petitioner Shri A. B. Kasturirangan & others had filed
special leave petitions in 2013 which were admitted on 16.9.2013 in Supreme Court. It
indicated that there existed constitutional or legal issue that was not properly interpreted in
above two judgments of Madras High Court.
But now the order dated 01.02.2017 of Hon’ble Supreme Court by single sentence -
“We do not see any ground to interfere with the impugned order(s). The civil appeals are,
accordingly, dismissed”
It means that the grounds submitted by the pensioners in their appeals were not
such that might have attracted the interference of the Supreme Court. Higher
Courts act only on the basis of the grounds taken by the appellants, which must
elaborate / find & point out the misinterpretation of the law in decision of lower
courts.
I do not have the copy of the appeals of the pensioners filed in Supreme Court., but while
putting hereunder, the observations and findings of Div Bench of Madras High Court; I
submit my grounds that should have been taken up in the appeals before Hon’ble Supreme
Court-
Here are the observations and findings of Div Bench of Madras High Court -
1. The Hon’ble Division Bench had erred by not analyzing the very aspect of the
liberalized/additional benefit (As defined by Hon’ble Supreme Court In V.Kasturi Vs State
Bank of India Case mentioned by Single Judge) given under the prevailing pension
scheme. It was the very important and probably the only basis of judgment by single
bench, in allowing the WP of pensioners.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
The other observation & conclusion of Division Bench were as under –
1. Pension of petitioners is out of settlement and not on account of statutory right.
Grounds-
a. Hon’ble Division Bench had erred in deriving the finding that the Pension of the
pensioners is not account of Statutory Right. The pensioner being paid pension in terms of
Pension Regulations 1995.These Regulations have been framed in consonance and under
the powers conferred on the Bank under the Banking Companies Act. They have a
statutory force of law. The mandate of the Pension Regulations which have a statutory
force of law cannot be altered by a joint note. It had already been admitted by the Banks
before Hon’ble Supreme Court in cases mentioned at para (b) & (c) below, and the fact is
that the Pension Regulations 1995 are Statutory in nature. The eligible pensioners
obviously have statutory right to get the pension under these Pension Regulations and not
on account of any Bipartite Settlement.
b. In Civil Appeal No. 1942 of 2009 in case of Bank Of India & Anr vs K.Mohandas & Ors
decided by Hon’ble Supreme Court on 27 March, 2009, the Banks namely -Bank of India,
Union Bank of India, Punjab & Sind Bank, Punjab National Bank, United Bank of India had
made submissions to Supreme Court as under reflected at para 39 of the judgment-
“39. On behalf of the banks, it was contended that Pension Regulations, 1995, are
statutory in nature and these Regulations cannot be altered, amended or read down in
view of any contract or a contractual scheme.”
c. Similarly in Civil Appeal No. 5398 of 2010 decided by Hon’ble Supreme Court on
13.02.2014 the Allahabad bank had made submissions as under at para 44 of the
judgment-
“44. On behalf of the banks, it was contended that the Pension Regulations, 1995 are
statutory in nature and these Regulations cannot be altered, amended or read down in
view of any contract or a contractual scheme.”
2. Pension of petitioners is not falling under 8th Bipartite Settlement/Joint Note. The plea of
the Banks was that the settlement arrived in terms of the provisions of the Industrial
Disputes Act, 1947 would bind the parties and since the benefit of pension conferred on
the respondents not on account of statutory right but only on account of the settlement,
they are not entitled to the benefits of the 8th Bipartite Settlement/Joint Note.
Grounds –
It is true that pensioners are not entitled to other benefits given in the 8th Bipartite
Settlement, which is meant mainly for Pay Revisions of working employees in service. But
it is equally true that in the subjected 8th Bipartite Settlement, the DA formula on pension
has been revised upward, and the pensioners were subjected to such changed DA formula.
This is the only one area of the Settlement that had benefited the pensioners. DA formula
has been revised upward, making it more beneficial for pensioners. The Pension
Regulations 1995 include the payment of DA on pension. The Pension Regulations 1995
cover the pensioners who retired from 1.1.1986 onwards till date, including those who
retired under the period of 8th Bipartite Settlement. These pension rules are to decide
calculation of Pension and Dearness Allowance payable to pensioners. As all the pensioners
are covered under Pension Regulations 1995, & thus forming a class are entitled to this
upward revision of DA formula introduced in 8th Bipartite Settlement in terms of ruling by
Honb’le Supreme Court in case of D.S.Nakara Vs Union of India decision [(1983) 1 SCC
305] and V.Kasturi Vs State Bank of India- decision dated October 9, 1998.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
The Hon’ble Division Bench had erred in accepting the plea of Banks that the Settlement is
binding on the pensioners. The pensioners are not a party to the Bipartite Settlement
which resulted in the joint note. Therefore, the Bipartite Settlement cannot contain
provisions which would be to the detriment of retired employees. All the retired employees
form a class by themselves vis-a-vis the employees who are working. The circulars or joint
notes issued cannot bind the retired employees especially if they are adverse to their
interest
The Hon’ble Division Bench had further erred in accepting the plea of Banks that pension
conferred on the respondents not on account of statutory right, without analyzing the
Statutory Status of Pension Regulations 1995, as discussed at point no. 1(a) to 1(c)
above.
3. When two sets of employees of the same rank retire at different points of time, one set
cannot claim the benefit extended to the other set on the ground that they are ‘similarly
situated’ and though they are retired with the same rank, they are not of the same class
or homogenous group and hence article 14 of the Constitution of India has no application.
(Article 14 – refers to equality before Law). The division bench further held that the
Nakara decision [(1983) 1 SCC 305], did not direct the payment of an equal amount of
pension to all pensioners.
Ground -
The Division bench has erred in taking the perception that the pensioners are asking for
payment of equal amount of pension to the employees of the same rank retired at
different points of time. The dispute is for giving equal treatment of 100% DA
neutralization under the new liberalized formula, to all the pensioners governed by same
Pension Regulation 1995 in the line of the judgment by Hon’ble Supreme Court in case of
V.Kasturi vs State Bank of India.
4. The division bench took the plea that Nakara decision [(1983) 1 SCC 305] did not direct
the payment of an equal amount of pension to all pensioners & referred the para 49 of
the judgment that is as under -) as under-
“In our opinion, it would make a marginal difference in the case of past pensioners
because the emoluments are not revised. The last revision of emoluments was as per the
recommendation of the Third Pay Commission (Raghubar Dayal Commission). If the
emoluments remain the same, the computation of average emoluments under amended
Rule 34 may raise the average emoluments, the period of averaging being reduced from
last 36 months to last 10 months. The slab will provide slightly higher pension and if
someone reaches the maximum the old lower ceiling will not deny him what is otherwise
justly due on computation.”
Ground- The Division Bench has erred in taking only a part of the para 49 from the
referred judgment - Nakara decision [(1983) 1 SCC 305]. The full para 49 reads as under
– Quote -
“49. But we make it abundantly clear that arrears are not required to be made because to
that extent the scheme is prospective. All pensioners wherever they retired would be
covered by the liberalised pension scheme, because the scheme is a scheme for payment
of pension to a pensioner governed by 1972 Rules. The date of retirement is irrelevant.
But the revised scheme would be operative from the date mentioned in the scheme and
would bring under its umbrella all existing pensioners and those who retired subsequent
to that date. In case of pensioners, who retired prior to the specified date, their pension
would be computed afresh and would be payable in future commencing from the specified
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
date. No arrears would be payable. And that would take care of the grievance of
retrospectively. In our opinion, it would make a marginal difference in the case of
past pensioners because the emoluments are not revised. The last revision of
emoluments was as per the recommendation of the Third Pay Commission
(Raghubir Dayal Commission). If the emoluments remain the same, the
computation of average emoluments under amended Rule 34 may raise the
average emoluments, the period for averaging being reduced from last 36
months to last 10 months. The slab will provide slightly higher pension and if
someone reaches the maximum the old lower ceiling will not deny him what is
otherwise justly due on computation. The words "who were in service on 31st March,
1979 and retiring from service on or after the date" excluding the date for
commencement of revision are words of limitation introducing the mischief and are
vulnerable as denying equality and introducing an arbitrary fortuitous circumstance can
be severed without impairing the formula. Therefore, there is absolutely no difficulty in
removing the arbitrary and discriminatory portion of the scheme and it can be easily
severed.”
The Hon’ble Supreme Court had in the para 49 (Remaining Portion in RED not taken
by Division Bench) clearly spelt out that the word “who are in service on ……and retiring
from service on or after the date ……“are words of limitation introducing the mischief and
are vulnerable as denying equality and introducing an arbitrary fortuitous circumstance
can be severed without impairing the formula. Therefore, there is absolutely no difficulty
in removing the arbitrary and discriminatory portion of the scheme.
In case of Bank pensioners in 8th Bipartite Settlement, the 100% DA neutralization
formula was made applicable to the employees who are in service on 1.11.2002 and
retiring from service on or after 1.11.2002 and in the light of the above para if read in
full from Nakara Judgment, it clearly held that this limitation is arbitrary and
discriminatory.
5. The benefits arising out of wage revision under 8th BPS w.e.f. 01.11.2002 towards
Dearness Relief at 100% neutralization cannot be granted to employees retired in the
period of earlier BPS i.e. 7th BPS because retirees prior to 01.11.2002 and retirees after
01.11.2002 cannot be said to be ‘similarly placed’.
Ground –
The benefit of upward revision of DA formula that provides for 100% DA neutralization
has been granted in 8th Bipartite Settlement. From amongst many terms of the
settlement, this is the only part of the settlement for which the pensioners retired in the
period of earlier settlements have become eligible for the sole reason that all the
pensioners irrespective of their retirement dates are governed by same Pension
Regulation 1995 and form a homogeneous group for the purpose of pension payments as
per Pension Rule. Thus all the past retired pensioners are very much similarly placed for
this one component of 8th Bipartite Settlement that improved the DA formula, upward
from tapered rates to provide for 100% DA neutralization. Upward revision of DA formula
amounts to liberalized /additional benefit, for which all the pensioners coming under
Pension Regulations 1995 are very much similarly placed in the lines of decisions by
Hon’ble Supreme Court in case of Nakara and V.Kasturi Vs State Bank of India.
6. The division bench also discussed on the financial impact of the formula on the resources
of the Public Sector Bank, where Banks have pleaded that if 100% D.A. Neutralization
demand to pre-November 2002 retirees is considered favourably during 10th BPS
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Negotiations – there will be considerable financial burden which will have to be carved out
from wage increase package meant for staff in service.
Ground -
The effect of the joint note is that employees who retired before the cut-off date would
get dearness relief at a lower rate than those who retired after that date. The dearness
relief paid is relatable to the cost of living index and varies in direct proportion to the
same. It must be borne in mind that dearness relief is an amount paid to the retirees to
neutralise the astronomical rise in prices. The object of paying dearness relief is the
same, irrespective of the date on which the employee retires. Inflation hits the employees
who retire before the cut-off date as hard as it does those who retire later. Therefore the
dearness relief cannot be different for two sets of retirees.
Pension Regulations 1995 are statutory in nature and provides for payment of pension
with DA, which is the statutory liability of the Banks to pay pension to eligible pensioners.
It is now well-settled that pension is property as understood under Article 300A of the
Constitution of India. Therefore, the right to property cannot be taken away without due
process of law in consonance of Article 300A of the Constitution of India. Thus in the
name of financial burden ,any part of the pension, including upward revised DA, cannot
be taken away by the joint note as joint note cannot constitute “law” as understood in
Article 300A and further the joint note which discriminates between retirees cannot have
the force of law.
7. The Div bench further pointed out that as agreed for the purpose of this settlement, the
additional cost of pension be shared between the parties at the ratio as agreed and
pension coasted accordingly. Thus we find force in the submission made by the learned
counsel for the appellants that, by virtue of the orders allowing the writ petitions, the
appellants have to contribute more to the said Fund and it would definitely cause financial
burden not only on the Banks but the employees who have to share it at the ratio agreed.
Ground –
In terms of Regulation-5 & Regulation -11 of Pension Regulations 1995 Banks are to
constitute Pension Fund and it no where suggest or stipulates that the pension costs as
valued by Actuaries every year at the year ended March will be shared by the employees.
The Regulation -5 & 11 read as under –
Regulation – 5 - Constitution of the Fund.
(1) The Bank shall constitute a Fund to be called the "……………. Bank (Employees') Pension
Fund" under an irrevocable trust within, one hundred twenty days from the notified date.
(2) The Fund shall have for its sole purpose the provision of the payment of pension or
family pension in accordance with these regulations to the employee or his family.
(3) The Bank shall be a contributor to the Fund and shall ensure that sufficient sums are
placed in it to enable the trustees to make due payments to beneficiaries under these
regulations.
Regulation – 11 -Actuarial investigation of the Fund.
The Bank shall cause an investigation to be made by an Actuary into the financial
condition of the Fund every financial year on the 31st day of March, and make such
additional annual contributions to the Fund as may be required to secure payment of the
benefits under these regulations:
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Provided that the Bank shall cause an investigation to be made by an actuary into the
financial condition of the fund, as on the 31st day of March immediately following the
financial year in which the Fund is constituted.
In the light of the above provisions of Pension Regulations 1995, the agreed sharing in
Bipartite Settlement, should not form any basis and legally also cannot take away the due
benefit of the pensioners, who in any way never had been party to such Bipartite
Settlements signed between Banks and Unions of bank Employees.
Any way now the position is that Supreme Court has dismissed the appeals of
pensioners in 100% DA neutralization matter. As I.O.B. Retirees Association was
the intervener in appeals, it is hoped that they may think of filing Review Petition
in Supreme Court in the larger interest of Bank Pensioners Community.
Now what next –
Let us not loose hopes. The ray of light is appearing from the judgment of Calcutta High
Court dated 26-09-2016 amended on 05-12-2016, in case of United Bank of India & Ors
Vs United Bank of India Retirees Welfare Association & Ors in the same matter of 100%
DA neutralization. Till date action of Bank on payment of 100% DA neutralization to
pensioners of United Bank of India is not known. If Bank pays, we have the scope and if
Bank prefers filing appeal in Supreme Court (Not yet reflected on web site of Supreme
Court), the matter can be intervened by Retirees Associations, for which we must convince
our Associations.
Please inform the action taken by United Bank of India after the mentioned judgment of
High Court of Calcutta.
Yours
S.K.MISHRA – BHOPAL – 09-02-2017
P.S. – At point No 7 the Banks have pleaded for costs & sharing by employees.
Now I will start working on the value of curtailed benefits of the pensioners in bipartite
settlements from 1993 till 2012 & share contributed by employees for increased pension
costs. You will soon receive the above data.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Dear Friends, Bhopal 17-02-2017
SUBJECTS- Banks Saved Rs. Rs.11666.93 Crores by curtailing benefits of the
employees and delaying dues of pensioners.
1. By Sharing Pension Cost with Employees in Pay Revisions- Rs.3603.71 Crores.
2. By Curtailing Benefits of Bank Pensioners- Rs. 8163.22 Crores.
3. Banks Earned By Denying/Delaying Legitimate Dues of Pensioners –Rs. 5816.18
Background –
The Division Bench of High Court of Madras in W.A.Nos.355 of 2013 and W.A.Nos.688
to 690 of 2013, decided by High Court on 17.06.2013, against the Pensioners, accepted the
plea of the Banks that the improved 100% DA formula given from 1.2.2005, is mainly on
account of Bipartite Settlement applicable to Pensioners retired after 31.10.2002. This
improvement was not considered applicable to pensioner retired before 1.11.2002. The other
plea was on account of cost of pension shared by the employees as agreed under that
Bipartite Settlement. The Hon’ble Judges accepted the said arguments of the Banks, at para
42 of the judgment. It is mentioned as under -
Quote –
42. The appellants also pleaded financial burden on account of upholding of the claim …
……….The said relief granted to the respondents/writ petitioners would definitely result in
huge financial burden to the appellants/Public Sector Banks and as per Regulation 5 of the
Pension Regulations, the Banks shall constitute a Fund and it shall be a contributor to the
said Fund so as to enable the Trustees to make due payments to beneficiaries covered under
the Regulations. From the 8th Bipartite Settlement entered into between the Indian Banks'
Association and the various Banks' Associations, we find that the parties had agreed, after
negotiations, that the total quantum of wage increase arising out of settlement to be
signed in this regard shall be Rs.1288 crores per annum including the cost of
superannuation benefits. It was further agreed that for the purpose of this settlement, the
additional cost of pension be shared between the parties at the ratio as agreed and pension
costed accordingly. Thus we find force in the submission made by the learned counsel for the
appellants that, by virtue of the orders allowing the writ petitions, the appellants have to
contribute more to the said Fund and it would definitely cause financial burden not only
on the Banks but the employees who have to share it at the ratio agreed. The
learned Single Judge has not taken into consideration the factual and legal aspects in proper
perspective and therefore, the impugned common order allowing the writ petitions warrants
interference”
The cost sharing thus became the prime reason for reversing the order of Single Judge,
which otherwise was in favor of pensioners.
The appeals of pensioners were also dismissed by Hon’ble Supreme Court on 1.02.2017.
Here it was comfortably forgotten/not brought on the records by both the parties, that in
subsequent Settlement, the costing of Pension liability was done by the Actuaries as of
March-2008 for retirees of earlier periods from Sept-1995 till March-2008 and also for
employees who were under CPF as on March-2008, with improved DA formula of 100%
Neutralizations @ 0.18% on full basic pension and the employees as well as retirees were
made to contribute for costed gap of Rs.6001.80 crores and Rs.934.50 crores respectively.
For this purpose retires were made to contribute 56% of CPF on returning back the CPF
amounts.
53
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Agreements For Sharing The Additional Pension Costs By Employees –
Despite the fact that Pension Regulation 1995, nowhere suggests for sharing of
increased pension costs, the employees were made to contribute for pension costs. The
Regulation- 11 of Pension Regulations 1995 reads – “Regulation- 11 - Actuarial
investigation of the Fund - The Bank shall cause an investigation to be made by an
Actuary into the financial condition of the Fund every financial year on the 31st day of March,
and make such additional annual contributions to the Fund as may be required to
secure payment of the benefits under these regulations.”
Here are the extracts from the MOU/Record Notes in the matter of Pay Revisions. The
matter of pension were also discussed mainly on the point of sharing of increased pensions
costs, and contrary to Regulation No 11 of Pension Regulations 1995, where only the Banks
are to contribute in pension funds, the employees were made to contribute as mentioned
here under-
1. REVISION FOR 1998-02 - MOU 11-03-1999
PENSION FROM 1.4.1998 - 31.10.2002
The parties initially agreed after prolonged negotiations that the total quantum of wage
increase arising out of a Settlement to be signed in this regard shall be 12.25% of the wage
bill of workmen employees for the year ended 31st March, 1997 including the cost of
superannuation benefits and accordingly signed a Memorandum of Understanding on 11th
March, 1999 at Mumbai. It is agreed that for the purpose of this Settlement Pension be
costed at 18.25% of the incremental. Pay arrived at by merger of Dearness Allowance at CPI
1616 points with the Pay as per the Settlement dated 14th February, 1995 and 14th
December, 1996.
Note - Here the Pension of the retirees was agreed to be fixed lower than what
it should have been at revised pay at 1684 CPI. Benefit of retires curtailed to
accommodate the demand of employees in service.
2. REVISION FOR 2002-07- Joint Note on Salary Revision dated 2nd June, 2005
RECORD NOTE OF DISCUSSIONS HELD ON VARIOUS DATES BETWEEN INDIAN
BANKS’ASSOCIATION REPRESENTING MEMBER BANKS AND AUTHORISED
REPRESENTATIVES OF WORKMEN UNIONS AND OFFICERS ASSOCIATIONS IN THE
MATTER OF PENSION
* These retirees between 01.04.1998 and 30.04.2005 will have their pension re-fixed
accordingly w.e.f. 01.05.2005 but no arrears of pension and commuted value of
pension is payable on account of such refixing of pension.
Note - Correction of MOU dated 11.3.1999 at Point No. 1 above done but arrears
curtailed.
* In respect of an employee retiring on or after 01.05. 2005, “average emoluments” as
defined in Pension Regulations for the purpose of pension, be calculated reckoning pay last
drawn during the last ten months of the employees’ service in the Bank.
* Since this is an improvement over the existing provisions, in view of the legal decisions
obtaining in the matter, the pension of retirees of the period 01. 04.1998 to 30.04. 2005 is
to be re-fixed with effect from 01.05.2005 reckoning actual ‘pay’ drawn by them prior to
retirement, i.e. during the last ten months of service in the Bank.
54
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
* The total cost to banks on account of such re-fixation in respect of retirees of the period
01.11.2002 to 30.04.2005 will be costed and taken together with the additional cost of
pension in respect of serving employees who are members of the pension Fund.
* In respect of retirees of the period 01.04.1998 to 31.10.2002, the additional cost on
account of refixation shall be shared equally between the banks and the employees
(officers and workmen),reckoning the annual additional cost which has been determined
at Rs. 62 crores.
Note - Here the at the cost of employees in service, the due & legal benefit of
earlier period retirees was restored.
Costing of Pension
In the last wage revision settlement, the additional cost of pension to banks was reckoned
at 16.5% of the pensionable pay of each member of the Fund and for the purpose of wage
revision, the additional cost to banks on account of increase in pay was shared equally
between banks and the employees at 8.25% of pensionable pay.
During the period since then, influenced by market factors, the cost of pension to banks had
gone up and IBA had placed the additional cost of pension to banks at 20.5% of the
pensionable pay. Following the procedure adopted in the last wage revision, this would have
meant sharing the total cost at 10.25% each by both the parties. While the Unions/
Associations were not agreeable for any increase in the additional costing more than 8.25%
however, after detailed discussions, it was agreed to reckon the total cost over and above
16.5% to be borne by the employees (Officers and Workmen) at Rs. 36 crores p.a This
would translate to the employees sharing the additional cost at 9.25% of pensionable pay
and the banks bearing the cost of the remaining 11.25%.
It is thus clear that employees share of additional pension cost was valued at Rs.36
crores per annum, as on March-2002 for pay revision for the settlement period from
1.11.2002 to 31.10.2007.
It may also be noted that Pension of the retirees on or after 1.5.2005, “average
emoluments” as defined in Pension Regulations for the purpose of pension, be calculated
reckoning pay last drawn during the last ten months, were taken for Pension Fitment, which
for the retirees of the Period from 1.4.1998 to 30.4.2005 was at pre-revised Basic pay with
DA of 1616 CPI, for pension purpose.
It is more interesting to note here that the agreement incorporates following sentence-
“Since this is an improvement over the existing provisions, in view of the legal
decisions obtaining in the matter, the pension of retirees of the period 01. 04.1998 to
30.04. 2005 is to be re-fixed with effect from 01.05.2005 reckoning actual ‘pay’ drawn by
them prior to retirement.”
Here IBA had clearly agreed the fixing of Pension, calculated on “average
emoluments” reckoning pay last drawn during the last ten months In respect of an employee
retiring on or after 01.05. 2005, is an improvement and such improvement has to be
given to all similarly placed retirees in the light of legal decisions obtaining as such
the pension of retirees of the period from 1.4.1998 to 31.04.2005 , who were being paid
pension at 1616 CPI were also given the benefit.
It is surprising that re-fixation formula of Pension is considered as improvement
applicable to all similarly placed retirees in the light of legal decisions obtaining,
but improvement in DA formula making it 100% DA neutralized, and given in the same
55
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
settlement, is not considered applicable to all similarly placed retirees, as pleaded by
Banks before Division bench of Madras High Court.
It is much more surprising that for bringing the parity by re-fixation of pension, of the
retirees of earlier settlement period from 1.4.1998 to 31.10.2002, the resultant increase in
pension cost on account of retirees was shared by the working employees. It goes
against the plea submitted before the Madras High Court in the case of 100% DA
neutralization to pensioners referred above.
This re-fixation of pension of earlier retirees costed at Rs 62 crores per annum
as on March – 2002. It was agreed to be shared equally and employees were made to
contribute funds, for the pensioners of earlier retired period also amounting to Rs.31 crores.
Thus under the Bipartite Settlement for the period from 1.11.2002 to 31.10.2007, the
working employees shared the increased pension costs at Rs.36 for self + Rs.31 for earlier
retirees = Rs.67 Crores Per Annum valued as on March 2002.
Note - The piece of cake taken away from the due share of Pensioner (1.4.98 to
31.10.2002 fitted at 1616 CPI) was thus returned back to them by taking it away
from the share of working employees. A good brain game played by IBA and made
the employees/retirees feel happy that their pension is re-fixed.
The quantity of offered cake is first mutually decided & fixed. Thereafter if
employees demand for more, cut the share of retirees and if retirees are entitled
for more legally, cut the share of employees. This had been the policy of IBA. In the
process the retiree’s dues have been curtailed every time from 1993 onwards in
every Bipartite Settlement. The figures will be advised in this letter.
HOW THE SHARE OF EMPLOYEES IS CONTRIBUTED
TOWARDS INCRAESED PENSION COST
Now obviously question will arise as to how the employees had been contributing for
increased pension costs as shown in Bipartite Settlements.
The simple way out evolved is, to derive the Revised Pay Scales in such a manner
that, it should reduce the costed pension liability to the extent of employees agreed
contribution. This makes increase in pay lesser than what should be as per calculations made
with merger of DA Slabs and agreed percentage increase. This type of set–off will take care
of the pension cost to be shared by the employees.
Example –
1. In Pay Revision of 2002-07, after merger of DA of 151 Slabs, increase of 13.25% was
agreed and Settlement Signed. Now take officer at 9th stage of officer Scale – I
B.Pay Old Scale
DA of 151 Pay with DA Pay with Increase B.Pay In Revised Scale
Set off for Pension Cost
% Set off
9820 3394.48 13214 14965 13820 -1145 -7.65%
2. In Pay Revision of 2007-12, after merger of DA of 137 Slabs, increase of 17.5% is
agreed and Settlement Signed. Now take officer at 11th stage of officer Scale – I
B.Pay Old Scale
DA of 137 Pay with DA Pay with Increase B.Pay In Revised Scale
Set off for Pension Cost
% Set off
14880 3669.41 18549.41 21796 20900 -896 -4.11%
But it was never thought that it is not only contrary to Reg-11 of Pension Regulations
1995, but the CPF optees were also unnecessary taxed by such set-off.
56
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Banks could not draw two types of Pay Scales- one applicable to those who are under
Pension and other for those who are under CPF. The easier way was adopted and Banks
saved a lot of money by such set-off from CPF optees for years together.
The employees of State Bank of India are not getting Industry wide Pension under
Pension Regulations 1995.The Pension Scheme of SBI is different. But by the set off
for Pension costs, the Pay Scales of SBI, employees are also lowered being same to
all Banks. Such allowance was payable to officers and employees of S.B.I/at 6.5%
and 6.4% respectively, of their revised basic pay, from 1.11.2007.
Reference - State Bank of India Officers Association, Hyderabad Circle, Circular
No. 4 of 28.1.2011 may be referred.
The CPF opted employees, who were not entitled for Pension, were also subjected to
sharing the Pension Costs by Public Sector Banks, from Nov-1997 onwards but never were
compensated as in case of State Bank of India mentioned above.
In Ninth Bipartite Settlement the CPF optees (Employees & Retirees) were given
pension option with condition that employees to pay 2.8 Months Pay of Nov-2007 and
retirees, retired till 27.4.2010 to pay 156% of CPF amount, they had received on
retirements.
The Actuarial Valuation reflected that, Pension Fund needed at Rs.17533.80 crores, as
on March-2008 for 272092 CPF employees and gap of Rs.6001.80 crores was there in
comparison to balance of CPF amount of these 272092 employees.
The Actuarial Valuation for 35380 retirees of the period from Sept-1995 to March –
2008, was also done & it was at Rs.4627.33 Crores, and the gap calculated was of Rs.3115
crores.
Total fund need was of Rs. Rs.17533.80 + Rs.4627.33 = Rs 22161.13 Crores for CPF
employee.
By the time the agreement was reached the number of retired employees increased
by 15324 to reduce the CPF employees in service to 256768.Thus total amount collected
from these CPF employees being 2.8 Month’s Pay amounted to Rs 1688.10 crores. The
amount @ 156% of CPF amount got back from 50704 retired employees was Rs. 3712.28.
Total amount so received was Rs. Rs.5400.38 Crores.
The CPF fund which was Rs 11532.00 Crores in March 2008 got reduced by Rs 662
Crores on retirement of 15324 employees from 1.4.2008 to April-2010. It was thus Rs.10910
crores. Adding Rs. 5400.38 crores as above the total comes to Rs.16310.38 crores.
The gap assessed as above and was to be met by Banks was thus Rs. Rs 22161.13
less Rs.16310.38 = Rs.5850.75 Crores actually, as against calculated by IBA at Rs.
6381.76 Crores.
(At Rs 6001.80 less 1800.54 = 4201.26 for employees, plus at Rs.3115 less 934.50
= Rs. 2180.5 for retirees-= Total gap Rs. 6381.76 Crores that was meant to be met by
Banks)
But it cannot be forgotten that the CPF opted employees were also subjected to
sharing the Pension Costs, by set- off in salary from Nov-1997 onwards, in all three Bipartite
Settlements. The sharing of Pension costs by setting off in pay was done at following rates
and accordingly quantum calculated is given in Tables below.
57
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Load Shared By Employees - Based On Record Note Dated 22 June -05 (Rs Crores) For Pension Total Amt.
Settlement Full Load Increase Total Employees Amount at 1684 CPI Set Off in
Block of Pay In Pension Amt of Share Set off in Pay Given - Cost Pay of
Period Revision Costs % Pens. Cost % of Cost Of Employees Employees Share
Employees
1997-02 817.81 26.50% 65.49 8.25% 20.39 0.00 20.39
2002-07 1288.00 30.50% 118.70 9.25% 36.00 31.00 67.00
2007-12 2980.00 36.00% 324.16 13.00% 117.06 0.00 117.06
The above figures of load per annum on Pay Revisions are taken from the Bipartite
Settlements as under –
Period Pay Increase Pension Cost Share Load- P.A. As On Signed On Settlement
1997-02 12.25% 26.50% 8.25% 817.81 31-Mar-97 27.03.2000 VII
2002-07 13.25% 30.50% 9.25% 1288.00 31-Mar-02 02.06.2005 VIII
2007-12 17.50% 36.00% 13.00% 2980.00 31-Mar-08 27.04.2010 IX
The subjected CPF employees for sharing cost of pension were as under -
No of CPF Optees Retired No of CPF Optees Retired
No of Serving CPF CPF Employees
CPF Employees As On From To
30-Sep-95 31-Mar-98 1680 307472 31-09-1995
1-Apr-98 31-Oct-02 9150 305972 31-03-1998
1-Nov-02 31-Mar-08 24550 296642 31-10-2002
1-April-08 27-April-2010 15324 272092 31-03-2008
Total CPF Retire 50704 256768 27-04-2010
The calculation of values of money by such set off in Pay of CPF Employees; with DA
thereon as per increasing CPI numbers from 1997 was done. Even small trader knows the
importance of time value of money. He tries to delay the payment of dues and in the interim
period, by time value of money, saves cost and increases profits. The Banks best know the
Time Value of Money.
The money so saved by the Banks, from the said set - off from pay of CPF optees,
who were not party to Pension costs, but were subjected to sharing the Pension Costs from
Nov -1997 onwards. During this period, Banks curtailed their pay for sharing the pension
costs and earned interest at least @10% per annum on the accumulating such set-off
amounts. Banks did not pay to them any allowance as was given by SBI, to its employees
who are not party for Pension Regulations 1995.
The Value of this money as in Jan-2017 is calculated and is given here under-
Value Of Set off in Salary from 1997 to 2012 P.S. Bank Employees for Sharing Pension Costs
For Pay No. of PS Bank Employees Qtly Amt Value
Revisions of Total CPF Set Off (Crs) Jan-17
1997 -02 637000 305792 5.1 697.38
Set Off Amt. 697.38 334.78 Mar-97 Crores
2002-07 538000 296642 16.7500 1297.03
Set Off Amt. 1297.03 715.17 Mar-02 Crores
2007-12 528000 272092 29.265 1509.3
Set Off Amt. 1509.3 777.78 Mar-08 Crores
Total Set Amt 3503.71 1827.73
3503.71
58
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
As mentioned above the apparent gap to be met by Banks remained at Rs.5850.75 Crores.
But by various types of curtailments – Lower Gratuity to retirees of 1993-94, Effective Date
of Pay Revision extended to 1.4.98, No arrears on pension at 1616 CPI, delayed benefit of
Reg-29(5) etc, the value of unpaid dues of pensioners is calculated to be at Rs.3981.08
crores. The charts are annexed below. The amount saved on 100% DA neutralization alone is
Rs. 4182.14 crores. Total value of curtailments are shown hereunder-
1. The value of set-off money for sharing pension costs - Rs.3503.71 Crores
2. Various other curtailments, Rs.3981.08 Crores
a. Lower Gratuity to retirees of 1993-94,
b. Effective Date of Pay Revision extended to 1.4.98,
c. No arrears on pension at 1616 CPI,
d. Delayed benefit of Reg-29(5)
3. The value of unpaid 100% DA neutralization- Rs.4182.14 Crores
Total Value of all curtailments Rs.11666.93 Crores
Thus in fact Banks have saved money to the tune of Rs 5816.18 crores (11666.93 less
5850.75) in the process, always made complicated for retirees under pension.
Now in the Pay Revision for the period from 1.11.2012 to 31.10.2017, new concept of
increase in Pay Slip was evolved and by offering such increase of 15%, with no sharing of
Pension Costs, the employees felt very happy.
The main problem in sharing this time would have been the employees appointed after
31.03.2010, who are not under pension and they are young enough to vehemently oppose
the concept of set-off from pay for meeting increased Pension Costs.
The hidden agenda, while fully met by Banks, it was finally disclosed that the increase
in Pensions is only of 3.02% to retirees of the period from 1.11.2012, although Pay increase
was of 15%. Here the Banks have saved 3% of Pension Costs. For increase of 3.2% in Pay
for Pension Purpose, the increased Cost of Pension was only 7%, whereas in all earlier
settlements; share of Banks had been minimum statutory at 10%, and thereafter added by
sharing with employees. It was 16.5%, 20.75% and 26% by Banks in last three settlements.
Thus by offering increase of 15% in Pay Slip & No Pension Cost on employees, the Banks
achieved dual objects- one lowered the Pension of all future retirees as otherwise would had
been by giving 10 to 15% increase in Pay after merger of DA of 401 slabs and second
reduced their load Pension Cost on increase of Pay.
Chart on values of 100% DA neutralization denied to Pensioners by IBA
ESTIMATED AMOUNT OF DA PAYABLE FROM 1-05-2005 TO 31-12-2016 – YEARWISE - Rs. Crores
Annual Amount Payable To Eligible Survived Pensioners For F.Y 2005-06 to 2010-11 - Rs Crores
To Retiree For Period For Period For Period For Period For Period For Period Total Sum
of Period 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2005 to 2011
1986-87 0.49 0.55 0.57 0.59 0.63 0.69 3.52
1987-92 8.07 9.19 9.62 10.15 10.98 12.14 60.15
1992-98 13.41 15.85 17.21 18.89 21.36 24.78 111.5
1998-02 13.89 17.4 19.93 23.02 27.51 33.68 135.43
VRS-2000 49.55 62.37 71.77 83.36 100.16 123.39 490.6
Total for Year 85.41 105.36 119.1 136.01 160.64 194.68 801.2
Intt @10% 4.32 20.25 34.72 52.44 74.56 102.52 288.81
Cumulative 89.73 215.35 369.17 557.62 792.83 1090.02 1090.01
59
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
ESTIMATED AMOUNT OF DA PAYABLE FROM 1-04-2011 TO 31-12-2016 – YEARWISE - Rs. Crores
Annual Amount Payable To Eligible Survived Pensioners For F.Y.2011-12 to Dec-2016 - Rs Crores
To Retiree For Period For Period For Period For Period For Period Apr-16 Total Sum
of Period 2011-12 2012-13 2013-14 2014-15 2015-16 Dec-16 2005 to 2016 1986-87 0.71 0.74 0.76 0.75 0.71 0.52 7.71
1987-92 12.83 13.55 14.35 14.67 14.56 10.89 141
1992-98 27.16 29.81 32.89 34.93 36.06 28.09 300.44
1998-02 38.2 43.3 49.27 53.6 56.46 45.02 421.28
VRS-2000 140.93 160.97 184.66 202.74 215.76 174 1569.66
Total for Year 219.83 248.37 281.93 306.69 323.55 258.51 2440.08
Intt @10% 135.98 175.88 223.41 278.44 340.93 298.61 1742.06
Cumulative 1445.83 1870.08 2375.42 2960.54 3625.03 4182.14 4182.14
Chart on values of various types of curtailments effected by IBA
On dues of Pensioners in Bipartite Settlement
Revision Head Number Per Head Rs. Amount Crs Value Dec-16
Unpaid
VI BPS Gratuity 2200 23600 5.19 50.34 50.34
Effective Date of Pay Revision extended to 1.4.98 in place of 1.11-1997
Effected Commutation 2600 90880 23.63 162.14 Unpaid
Pensioners Pension 2600 166410 43.27 80.43 242.57
VII BPS At 1616 CPI In Stead of 1684 CPI
Normal Commutation 23810 37200 88.57 399.45 Unpaid
Normal Pension 23810 49515 117.89 367.11 766.56
VII BPS VRS 2000 & At 1616 CPI In Stead of 1684 CPI
No Reg-29 Commutation 41270 42030 173.46 801.81 Unpaid
No Reg-29 Pension 41270 34485 142.32 465.59 1267.40
Eligible Reg-29 Commutation 38090 38140 145.28 671.54
Eligible Reg-29 Pension 38090 32385 123.35 403.55 1075.09
VII BPS VRS 2000 Eligible Reg-29(5) Not Paid by 20 Banks Till Oct-2009
Eligible Reg-29 Commutation 34600 25310 87.57 202.76
Eligible Reg-29 Pension 34600 86927 190.59 300.77
Less Difference Paid In Nov -09 -77015 -266.47 -266.47
Curtailed Value of 34600 Pensioners till Oct -09 237.06 485.12 485.12
VII BPS VRS 2000 Eligible of Two Banks Not Paid Reg-29(5) Till March -2014
Eligible Reg-29 Commutation 1273 25310 3.22 11.63 Unpaid
Eligible Reg-29 Pension 1273 92017 11.71 23.29
Less Difference Paid In Marc-14
By Vijaya Bank 819 -92017 -7.54 -7.54
By Allahabad Bank 454 -219855 -9.98 -9.98
Curtailed Value of 1273 Pensioners till Mar-14 17.41 22.84 22.84
VII BPS VRS 2000 Eligible Reg-29(5) Not Paid by 4 Banks Till Dec-16
Eligible Reg-29 Commutation 1790 25310 4.53 20.94 Unpaid
Eligible Reg-29 Pension 1790 124322 22.25 49.40 70.34
IX BPS But VRS 2000 of 4 Banks II Opted Not Paid Reg-29(5)
Eligible Reg-29 Commutation 60 21930 0.13 0.26 Unpaid
Eligible Reg-29 Pension 60 63897 0.38 0.56 0.82
IX BPS VRS 2000 Eligible Reg-29(5) II Optees Paid in Feb -11 & Mar-14 Unpaid
II Opted Number 1550 Full Paid 0 NIL
Hope UFBU will understand the importance of preparedness while negotiating pay
revisions. 3981.08
S.K.MISHRA – BHOPAL – 13-02-2017
60
ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Dear Friends, BHOPAL 11-03-2017
HOW BANK’S COMPLIED WITH THE STATUTORY
PENSION REGULATIONS 1995
PREAMBLE
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 enacted by
an ordinance No.3 of 1970, provided for the acquisition and transfer of the undertakings of
certain banking companies, in order to control the heights of the economy and to meet
progressively and serve better, the needs of development of the economy in conformity with
national policy and objectives. It aimed at the philosophy of welfare of the public through
State Owned Banks.
Thus Public Sector Banks came into existences that are `State' within the meaning of
Article 12 of the Constitution of India. As the Public Sector Banks are owned by Govt. which
has a goal of setting up of a welfare State, introduced a Pension Scheme as retrial benefit,
that is grounded on 'considerations of State obligation to its citizens’ who having
rendered service during the useful span of life must not be left to penury in their old age.
Thus Pension Regulations 1995 were enacted, under powers conferred by Clause (f) of
Section 19 (2) of the Banking Companies (Acquisitions and Transfer of Undertakings) Act,
1970. Hence, it is a statutory instrument. They were made by the bank in consultation with
the Reserve Bank of India, upon taking prior permission of the Central Government and had
been adopted by the Board of Directors.Thus it is expected from the Public Sectors Banks,
being in the role of “State” within the meaning of Article 12 of the Constitution of India, that
they will fulfill their obligations towards their pensioners, much more sincerely and liberally.
RULINGS OF HON’BLE COURTS RELATING TO PENSION
1. Hon’ble Supreme Court at paragraph 25 in U.P. Raghavendra Acharya & ors Vs State of
Karnataka & ors reported in (2006) 9 SCC 630 held that Pension is not a bounty or a
bonanza for an employee, without cavil. It is a measure of social welfare and is paid to a
retired employee for his meritorious service with the employer. In fact it is a deferred wage
which is paid to the employee. It is the property of an employee in terms of Article
300 A of Constitution of India. An employee cannot be deprived of his rightful
claim to pension except in accordance with law. The joint note cannot be
construed as “law” as it cannot govern the pension payable to retirees who were
not in service when it was issued.
2. Hon’ble High Court of Madras in Writ Appeal No.1209 of 2007 at para No 18 reconfirmed
the statutory status of Pension Regulations, 1995 that are framed in exercise of the
powers conferred by clause (f) of sub section (2) of Section 19 of the Banking Companies
(Acquisition and Transfer of Undertakings) Act and further by referring judgment of the
Hon’ble Supreme Court in Vidya Dhar Pande Vs. Vidyut Grih Sikshasamiti [(1988) 4 SCC
734] held that, they are having statutory force.
3. Hon’ble Supreme Court while deciding the Civil appeal No. 1942 of 2009 {Relating to REg-
29(5) applicable to SVRS 2000 pensioners} against Bank of India, Punjab National Bank,
Punjab & Sind Bank, Union Bank of India and United Bank of India, at para No.33
concluded that the banks in the present batch of appeals are public sector banks and are
‘State' within the meaning of Article 12 of the Constitution and their action even in
contractual matters has to be reasonable, least, it must attract the wrath of
Article 14 of the Constitution.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Assessment of Attitude of Public Sector Banks as Employer & also in Role of
‘State’ towards their own pensioners-
Now going with the expectations from Public Sector Banks in role of “State” in
complying with the above rulings by Hon’ble Apex Court relating to Pension, we may relook
the history of IBA/ Bank’s action, in discharging the Statutory Liability towards their
pensioners.
Knowing well that the Pension Regulations 1995 are Statutory in nature and these
Regulations cannot be altered, amended or read down in view of any settlement /contract
or a contractual scheme, in every Bipartite Settlement IBA/Banks violated Statutory
Pension Regulations and curtailed the benefits of the pensioners one way or other.
Resultantly many Writ Petitions were filed by aggrieved pensioners and most of these are
pending for years in Supreme Court. The summary is as under -
1. The employee who retired during 1993-94 falling under the 6th wage settlement were not
paid gratuity amount on the revised pay and allowances as required under the provisions
of gratuity act. Special Leave Petition (Civil) 28332 -28362 of 2012 BY Indian Banks'
Association Vs Y.R.Shenoy & Ors. Connected to Civil Appeal 1975 of 2010.
2. In 7th Bipartite Settlement (1998 to 2002), the pay revision was made with merger of DA
at 1684 CPI. But for retirees/ pensioners the Basic Pay for the pension purpose was
accepted at pre-revised pay scale with merger of DA at 1616 CPI. Appeals of Canara Bank,
Vijay Bank, Syndicate Bank, State Bank of Mysore, Indian Overseas Bank, are now
connected to one case - Civil Appeal No 5525 of 2012 of Bank of Baroda & another Vs
G.Palani & Others and matter is pending in Supreme Court.
3. In 8th Bipartite Settlement 100% DA neutralization was given but all preNov-2002
pensioners were excluded. The Civil Appeal No.8420 of 2013 filed by A.B. Kasturian &
Oths Vs Canara Bank, admitted on 16.09.2013was being heard in Supreme Court. Till On
15.09.2016 it was heard for seven times and on 9th hearing on 11.11.2016.IBA was
allowed as intervener. Suddenly on 1.2.2017 it was concluded by Hon’ble Supreme Court
that appeals have no grounds that may attract interference of the Apex Court in the
natter. Now other Special Leave Petitions (Civil) 7368 -7371of 2017 filed by United Bank
of India against the order of Calcutta High Court in WP No.507 of 2012 decided on 26-09-
2016 are pending in Supreme Court.
4. In 9th Bipartite Settlement the Second Pension Option was agreed to be given to all
retirees who retired with CPF. But IBA while issuing the Circular changed the word from
“Retired“ to “Retired on Superannuation”. With this change the employees/officers
retired after taking VRS under Pension Regulation 29 and those who were Compulsorily
retired by the Bank, were excluded while implementation the Joint Note dated 27-4-2010
and were denied of justified option for pension.
4(a) Despite the SLP No. 8506 of 2016 of Punjab & Sind Bank rejected by Supreme Court
on 13.04.2016 and judgments by High Courts of Punjab and Haryana passed in
W.P.No.2553/12 (O & M) V.K.Vohra Vs. Central Bank of India and others and
Judgment of Andhra Pradesh High Court passed in W.P.No. 9069/11 Sreeram
Ramamurthy Vs. Andhra Bank, rep. By its Chairman and Managing Director The
said judgment of writ court got stamp of approval from the Division Bench in
W.A.No.905/12. The SLP (Civil) No. 35449 of 2013 filed by the Bank is dismissed by the
Supreme Court on 05.09.2014. Still the IBA/Banks have not yet given chance of Second
Option to Compulsorily Retied Officers.
4(b) Similar was the fate of the denial by the IBA & Banks to Compulsorily retied
employees and after Judgment in Special Leave Petition No.17054/2009 by Supreme
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Court of India Dated 11.12.2013 in Bank of Baroda vs. S K Kool & Anrs the IBA & Bank
had to include these workmen employees also for Pension option under the said Joint Note
dated 27-04-2010.IBA advised the Bank by CIR/HR &IR/KU/M1/1004 Dated the 30th June
-2015, addressed to CEOs of the Banks to initiate suitable amendments in Regulation 22
of the Bank Employees’ Pension Regulations, 1995 as far as workmen employees are
concerned. But so far even after more than 3 years from the dat eof judgment by Apex
Court the second option to workmen employees has not been given by the Banks.
BANK’S PLEA IN HIGH COURTS
In High Courts Banks/IBA had pleaded that all above are in accordance of Settlements
reached between the Unions/Associations of employees/officers of the Bank and IBA
representing the Public Sector Banks and the retirees are bound with the terms of the said
Settlements.
It may not be out of place to mention here that in civil appeal No. 1942 of 2009{Relating
to REg-29(5) applicable to SVRS 2000 pensioners} Bank of India, Punjab National Bank,
Punjab & Sind Bank, Union Bank of India and United Bank of India at para 39 pleaded –
Quote -
“On behalf of the banks, it was contended that Pension Regulations, 1995, are statutory
in nature and these Regulations cannot be altered, amended or read down in view of any
contract or a contractual scheme.”
The above self contradictions by the Banks, very well spell out the motives of the Banks,
which is nothing but to any how delay payment of legitimate dues of the pensioners and in
the interim period earn interest on the funds so held.
In all above matters, the Writ Petitions were decided against the Banks. Banks every time
filed the appeals in Supreme Courts and all the above matters are yet to reach finality by
Supreme Court.
CONCLUSION
It can well be understood that Banks have used the Settlements as tool to deny/delay the
legitimate dues of the pensioners.The IBA supported by Public Sector Banks have created
such circumstances in the name of Settlements that warranted litigations and these
litigation prolonged by mighty Banks/IBA have succeeded in delaying payments of the
dues of the pensioners. In the process Banks have saved thousands of crores of rupees at
the cost of old pensioners. Can it be termed as good behavior of the Public Sector Bank
being in the role of “State” within the meaning of Article 12 of the Constitution of India.?
Role of Unions/Associations in Settlements-
The Associations /Unions are dealt by the IBA in Wage Settlements in a way that delays
the process of Settlement. It had averaged delay of 32 months in last 8 settlements. By
virtue of intentional delay by IBA, the Associations generally keen down to pressure from
the members for early wage revisions.
Hope everybody concerned will understand the game of hide & seek played by Banks with
pensioners and all the retirees will unite as a strong force to fight with the injustices. It
can be done only by strong & regular demonstrations/dharanas to awaken the
Government on the issues confronted by Bank Pensioners.
S.K.MISHRA – BHOPAL- 11.03.2017
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Dear Friends Bhopal – 23-03-2017
Subject -Legal Battle On 100% DA Neutralization Matter Has Become Unavoidable
Pre-2002 Retired Pensioners had hopes that SLPs in Supreme Court in subject matter
will be decided in favour of pensioners. But on 1-2-2017 the Hon’ble Supreme Court
dismissed appeals stating that that there were no grounds to interfere in the order of Madras
High Court. Although it was a set-back, but only on the point that the concerned individuals
could not present the legal ground & law points that could have attracted interference of
Supreme Court.
But the fact remains that the aspect of equity as per Article -14 of constitution of
India has been violated by Banks/IBA, in making discrimination amongst a homogeneous
group of pensioners, by not giving 100% DA neutralization formula to pre-2002 pensioners.
Equity has to be achieved, but how?
ATTITUDE OF IBA ON THE ISSUE OF 100% DA NEUTRALISATION
In may-2015 on persuasions by CBPRO & UFBO,IBA agreed to consider the matter after
estimating the load, based on Actuarial Valuations.IBA has not moved an inch ahead in this
direction, despite the fact all the Banks have already reflected actuarial valuations for all
pensioners in Balance Sheets of March-2016. It is based on the data of all pensioners
including pensioners of pre-2002 periods, but IBA could not collect the same from Banks.
CBPRO, through Regional Labour Commissioner at Mumbai tried the conciliation on the issue,
but IBA did not attend the first meeting dated 24-01-2017. CBPRO met IBA On 15-02-2017
to discuss the issue but it was advised that Management Committee of IBA has not
considered the matter as the mandate was not available from the Bank Managements to IBA
to resolve the Retirees’ issues. In another round of conciliation proceedings before Assistant
Labour Commissioner on 28-2-2017, IBA stepped back on the ground that the Hon’ble
Supreme Court had dismissed the Civil Appeals of some of the individual Retirees.
HISTORY OF BANKS & IBA IN DENYING LIGITIMATE DUES OF PENSIONERS
The above attitude of Banks/IBA towards pensioners is not new. It has long history of
denying /curtailing the benefits of the old pensioners in the name of Settlements. The
pensioners have been put to losses in almost all the settlements from 1993 onwards as
under-
Lower Gratuity paid to retirees of 1993-94, Lower pension fitted at 1616 CPI in place
of Pay being at 1684 CPI & no arrears of pension paid on correction of illegality in May-2005,
Benefit of Reg-29(5) denied to pensioners retired under VRS Scheme of 2000, Second Option
for Pension not given to Voluntary Retired and Compulsorily Retired Employees, and benefit
of Regulation-26 denied to specialist officer.
In all the above matters the Writ Petitions filed by individual pensioners/retirees were
decided by different High Courts, in favour of employees mostly on one principle that any
part of the pension, cannot be taken away by the joint note, as joint note cannot constitute
“law” as understood in Article 300A and further the joint note which discriminates between
retirees cannot have the force of law.
But Banks dragged the matters in Supreme Court. The benefit of Reg-29(5) to
pensioners, Second Option, to Voluntary Retired Employees & Compulsorily Retired Officers
and Pension to Terminated Workmen, could come through Supreme Court only, by the
efforts of individual pensioners/retirees. The other matters are still pending in Supreme
Court and individuals are fighting against the money power of Banks/IBA.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Thus looking to the factual position as reflected from the history of IBA/Banks, expecting
the justice from IBA/Banks on their own will be nothing but living in fool’s paradise.
Whatever little have been achieved, is only through legal battle by individuals.
Thus it seems that the only way out left is to get the due benefit of 100% DA
neutralization through legal recourse. It is good news that based on the aspect of equity in
line with Nakara Case; Division Bench of High Court of Calcutta has, on 26-09-2016, passed
a judgment in WP No.507 of 2012, in 100% DA neutralization matter in favour of pensioners
against United Bank of India. The order of High Court is as under – Quote-
“We find that the distinction, between the pre-November, 2002 retirees and
post-November, 2002 retirees, is unreasonable, arbitrary and discriminatory. There
is no justification for the same. Though each bank which is a member of the Indian
Banks Association has a separate identity, the mandate of the Pension Regulations
which have a statutory force of law, cannot be altered by a joint note. Therefore,
we direct the bank to comply with Regulation-37 of the Pension Regulations and to
pay dearness relief to the Pre-2002 retirees at the same rate as enjoyed by the
post-2002 retirees.”
After above judgment United Bank of India has filed appeal in Supreme Court. The
appeal is numbered as SLP(Civil)7368-7371 of 2017.Now in these appeals, onus is on the
bank to establish that the classification of pensioners in two groups - one getting tapered DA
and other getting 100% DA neutralization is not unreasonable, arbitrary and discriminatory.
The bank can not establish it and the appeal is certainly going to be in favour of pensioners
who are party in case.
The only fear is that other Banks may not follow the order. It is evident from history as
under-
1. Even after Supreme Court Judgment on 27-03-2009, the benefit of Regulation 29(5)
was not given by Vijaya Bank & Allahabad Bank and it could come through other WP
filed by Pensioners that were finally decided by Supreme Court on 13.02.2014.
2. Supreme Court has on 13-04-2016 decided against Punjab & Sind Bank, the matter of
Second Pension Option to the compulsorily retired officer, but bank has given Second
Pension Option to the only officer who had fought the case. The other similar officers
have been denied of Second Pension Option despite representations.
3. Benefit of Regulation-26 to specialist officers has been given by State Bank of
Hyderabad, Vijaya Bank & Bank of India after Judgments by the High Court, but, Bank
of Baroda & Allahabad Bank have filed appeals in Supreme Court.
From the above three examples it can easily be concluded that individuals may
get benefit after Supreme Court verdict, at the most United Bank of India may
implement the order to their pre-2002 pensioners, but other Banks may not, unless
ordered by court. So it will be prudent if Retirees Associations become the intervener
in the SLP (Civil) 7368-7371 of 2017 at appropriate stage for the benefit of all the
pensioners.
Please e-mail your considered opinion on the proposal of becoming
intervener in case in Supreme Court, for the benefit of approx. 2100 pensioners of
Allahabad Bank included in 85000 surviving pre-2002-pensioners of all Banks, hoping
for 100% DA neutralizations for last 12 years.
Sincerely Yours
S.K.Mishra – Bhopal - e-mail Address – [email protected]
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Dear Friends, BHOPAL – 23-03-2017
Subject- Fate of Filing Too Many Writ Petitions in Courts by Individuals
After introduction of Pension Regulations 1995, the Banks/IBA had, in every Bipartite
Settlement, in the name of agreements with working employee/officers associations,
curtailed the pension benefits of the retirees in one way or other. Facts are as under -
Lower Gratuity paid to retirees of 1993-94, Lower pension fitted at 1616 CPI in place
of Pay being at 1684 CPI for retirees of April-98 to March-2005 & no arrears of pension paid
on correction of illegality in May-2005, Benefit of Reg-29(5) denied to pensioners retired
under VRS Scheme of 2000,100% DA neutralization not given to pensioners of pre-nov-2002
periods, Second Option for Pension not given to Voluntary Retired and Compulsorily Retired
Employees, though agreed in Joint Note dated 27-4-2010,and benefit of Regulation-26
denied to specialist officer.
In all the above matters the Writ Petitions, filed by individual pensioners/retirees were
decided by different High Courts, in favour of employees, mostly on one principle that any
part of the pension cannot be taken away by the joint note, because joint note cannot
constitute “law” as understood in Article 300A and further the joint note, which discriminates
between retirees cannot have the force of law.
But Banks dragged the matters in Supreme Court. The benefit of Reg-29(5) to
pensioners, & Second Option, to Voluntary Retired Employees could come through Supreme
Court only. But the decided matter of Second Option to Compulsorily Retired Officers and
Pension to Terminated Workmen had not yet been given to all similarly placed retires by the
Banks.
Whatever little is achieved; it could come through Supreme Court only, by the efforts
of individual pensioners/retirees. The other matters are still pending in Supreme Court and
individuals are fighting against the money power of Banks/IBA.
In the beginning period say- from 1995 to 2009, most of the Bank retirees were not
united under the forum of Associations. During the period from 2009 onwards; almost all the
public sector banks retirees have formed All India Associations of Retirees. The Bank-wise
Associations of retirees are affiliated to AIBRF or AIBPARC or similar other Apex
Confederation.
It may be observed that till date in all the disputed/denied pension benefits the
individuals have approached the courts. But due to extra enthusiasms by some of the groups
of the individuals, in matter of pension at 1616 CPI, they have filed the Writ Petitions in
a large number and that had delayed the process of getting early justice from the
court of law.
The examples of very old matter Lower pension fitted at 1616 CPI in place of Pay being at
1684 CPI for retirees, is there for such abnormal time consuming process. In the matter, a
large number Writ Petitions were filed in High Courts during 2000 to 2002 by the pensioners,
but till date these are pending in Supreme Court. The only reason appeared is, very large
number of Writ Petitioners in individual capacity.
Here are the details of WPs filed in the matter of lower pension at 1616 CPI. The
Matters is still undecided for 16 years and at present SLPs filed by Banks are pending in
Supreme Court.
Single Bench of High Court of Karnataka at Bangalore in Order Dated 21.4.2011
decided petitions of 522 individuals as per List (A). Besides above, the Single Bench of High
Court of Karntaka in orders dated 8/8/2007, 23/3/2011, 6/4/2011, 8/4/2011 & 30/5/2011
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
decided Writ Petitions of approx.250 individuals also. In these writs some of the retirees of
VRS 2000 Scheme prayed for benefit of Reg-29(5) and or for quashing the amendment in
Reg-28 of Pension Regulations 1995. In these WPs. B.O.Baroda, Canara, Central, Indian
Bank, I.O.Bank, State Bank of Mysore, Syndicate, UCO, Union and Vijya Bank – thus 10
Banks were involved.
After judgment of Supreme Court in Bank of India Vs K. Mohandas in 2009, the
benefit of Reg-29(5) was given by the Banks and as such the Appeals filed by the Banks in
the Matter of Pension at 1616 CPI only remained undecided. For this Banks had filed appeals
in Division Bench that were numbering 509. These were decided on 08-03-2012 and Banks
moved to Supreme Courts, where 436 SLPs are pending in the matter of pension at 1616 CPI
as under –
Number of SLPs In Supreme Court filed by Banks No.
Arising From HC Order
In
Main Case-SLP(C)No.24889/2011By Bank of Baroda=5525 of 2012 1 WA No.1209/2007 28.6.2011
1. SLP (C) No. 18139/2012 By Bank of Baroda = 5611 of 2012 1 WA No.590/2012 of 8.6.2012
2. SLP (C) Nos. 20661-20668/2012 By Canara Bank 8 WA No.4256/2012 of 8.3.2012
3. Special Leave Petition (Civil) 29820 -30047 Of 2012 By Vijaya Bank Changed to Appeal Civil 3026-3253 OF 2013 228
WA No.4260/2011 of 8.3.2012
4. Special Leave Petition (Civil) CC 23184 -23352 Of 2012 By State Bank of Mysore Changed to SLP (Civil) 15640-15808 of 2013 169
WA No.4093/2011 of 8.3.2012
5.Special Leave Petition (Civil) 23848,24851,23773,23777-23797 Of 2012 By Syndicate Bank and 24
WA No.4901/2011 of 8.3.2012
6. Special Leave Petition (Civil) 31470 -31474 Of 2012 By Indian Overseas Bank 5 WP No.47033/2001of 21.4.2011
Total Appeals Pending In Supreme Court 436
CAUSES OF DEALY - As per procedure, the notices are issued to all respondents (In above
cases the 436 individual pensioners), service of notice is recorded, their replies are awaited
and received/recorded in cases, where after counter–reply by appellants are received &
recorded. After completing the said process the dates for arguments are fixed and heard
from each side. One can imagine how long should it take for 436 respondents. The result is,
the matter is still not finally decided.
From the facts as above, it should be understood that the matter of common cause of the
Bank Pensioners & Retirees must be taken up by a group formed as Resisted Body or Union
or Association of Pensioners. Here only the registered body will represent, all the similarly
placed pensioners / retirees in the court and benefit will come to all.
Now in present day pensioners & retirees have opportunity of becoming members of All
India Pensioners/Retirees Associations of individual banks (Public Sector Banks). The
pensioners can now impress upon their Associations to be the party in court cases of
common cause.
Hope pensioners /retirees will understand the benefit of unity under Associations.
Yours Sincerely
S.K.MISHRA – BHOPAL – 23-03-2017
Main Case - Special Leave to Appeal (Civil) No(s).24889/2011 This Case is converted to Civil
Appeal No.5525 of 2012 Bank Of Baroda & Anr Vs. G.Palani & Ors & All above cases are connected to this.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
The Fight for Justice by Old Pensioner -Pre-1986 Retirees
Further Fight for Dues of Approx. Rs. 18.50 Crores of Old Scheme Pensioners
Who Were Paid Gratuity In Nov -2010.
During the periods of negotiations with IBA for pay revisions, in last settlement & for the
ensuing 11th settlement, from every corner of Bank Pensioners, various suggestions for
demands are poured. The representatives of the working employees & officers, in the form of
UFBU, have included these demands in their charter of demands. Pensioners eagerly wait for
the outcome for betterment of their pension & benefits. We the retirees and pensioners of
Allahabad Bank are not exceptions.
But we have almost forgotten the pathetic condition of our seniors who are under Old
Pension Scheme of our Bank. True, now it is close ended pension scheme and will certainly
die its own death on the day when last such pensioner will breathe his last. But they are
some who are still alive. They were our heroes, including one – Shri Dayaldas Khanna –
known by all present pensioners at least in Allahabad Bank.
The attitude of Allahabad Bank toward these old pensioners can well be understood from
the following facts of history - not very old. It was only in the month of Oct-2010 when
payment of monthly pension was stopped to the old pensioners numbering 169 only for
which monthly pension pay-out was just Rs.9.03 lacs on that date. The pension was not paid
to them for the period up to June -2013, unless it could be decided by the judiciary in favor
of these old unsung heroes. The battle was fought by them only.
The history stared from the dispute on Old Pension considered to be in lieu of Gratuity by
the Bank. In year 2010 Supreme directed the Bank to Pay Gratuity as per Gratuity Act of
1972 to the then pensioners who were being paid Old Pension.
Consequent upon the Judgment by Supreme Court –
a. All the pensioners under old scheme were paid (Refunded) gratuity by the Bank on
1.11.2010 in implementation of judgment dated 15-12-2009, of Supreme Court.
Payment of Old Pension was stopped to these Pensioners, from October, 2010 vide
instructions vide HO IC No. 11185 of 30.10.2010.The effect of this circular was varying on
three category of retirees as under-
i. As prudence prevailed upon most of old pensioner retired during 1.1.1986 to 29-09-1995,
they had already opted under first pension option in 1995 for New Pension by paying CPF
with 6% Interest and now they got the gratuity refunded in Oct-2010.They were happy. Still
some had not gone for new pension.
ii. Those who were continuing under Old Pension scheme (Mostly Retirees of period from
29-09-1995 onwards), also felt happy by getting refund of Gratuity and they did not feel the
pinch as they had seen the chance of switch over to New Pension by Second Pension Option,
already agreed by Banks in Joint Note of April 2010 and to this effect Bank’s Circular was
floated, just after the circular of stopping Old Pension. They were to get New Pension w.e.f.
27-11-2009. The new pension was higher than what they were getting under Old Pension,
and benefit of commutation and family pension was to come to them. So this category of
retiree was complacent.
iii. Only all those old pensioners retired prior to 1.1.1986 were worst effected by stopping
monthly pension as they were not eligible for New Pension under Pension Regulations 1995.
The number was very limited. In the year 2010 they were of the age of 84 plus years. Who
was to care for them?
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
The effected Number of these old Pensioners was just 169 and total monthly pension
payment in Sept -2010 to them was just Rs. 902868.56, which gives average monthly
pension of just Rs.5342.41 per pensioner.
The Bank had paid Gratuity amount total to Rs.46.63 lacs to these 169 pensioners –
Average per Pensioner comes to Rs.27594/- equal to a little more than FIVE MONTHS
PENSION. The gratuity amounts were very low in the years from 1975 to 1992 the period of
retirement of these old pensioners.
The ceilings on Gratuity were as under-
Gratuity Act, 1972 Wage limit For Months Amount
Up to 30.6.84 1000 20 20000
w.e.f. 1.7.1984 1600 20 32000
w.e.f. 1.10.1987 2500 20 50000
Ceiling from 1.10.87 2500 Limited to 50000
w.e.f. 1.12.1992 3500 Limited to 50000
One can thus understand easily that by refunding Gratuity in compliance of judgment
of Supreme Court and the decision of stopping the pension of very old pensioner was only
with one angle of savings & profits to the Bank.
b. The timing adopted by bank was such that most of the pensioners could not
understand the game of the bank in avoiding Interest Payment on Gratuity for delay period.
In fact all such pensioners got the Gratuity only on 1.11.2010, and they were entitled for
interest on Gratuity amount as per Section 7(3A) of Gratuity Act-1972, for the period of
delay. This delay period is in years. The delay period was from the Date of retirement to
1.11.2010, when gratuity was actually /finally paid to the retiree by the Bank.
c. The delay Period will be counted for every such pensioner who has received Gratuity
refunded by Bank on 1.11.2010. The period will be different for every pensioner and it will be
for the period “From Date of Retirement to 1.11.2010.”
d. Fortunately, rather I must say being vigilant for rights one of the VRS 2000 Scheme
retiree - Sh. A.C. Aggarwal, who was asked to refund the gratuity for getting Old Pension
refused to refund the Gratuity. He had filed WP No.2261/2012 in the year 2002 itself, in High
Court Delhi, seeking direction to the Bank for payment of Old Pension to him along with
Gratuity as per Act. The W.P. could be decided in his favour on 15-11-2011 (Although Bank
Pleaded that A.C. Aggarwal had already opted for new Pension under Second Option in the
month of Dec-2010 and is being paid new pension from 27-11-2009. (As per Joint Note of
28-04-2010)
Delhi High Court ordered that Sh. A.C. Aggarwal is entitled to old pension in addition
to the gratuity amount received by him. The Bank was accordingly directed to release the
arrears of pension due to the Sh. A.C. Aggarwal, within six weeks together with interest
@6% per annum from the date when the pension for each month would have fallen due and
till the date of payment. Thus he was declared eligible for payment of arrears of old pension
from 1-05-2001. (He was retired on 30.4.2001).
Bank filed appeal In Supreme Court - Civil Appeal No. 9024 of 2012, and it was decided in
favour of Sh.A.C. Aggarwal, by order dated 13-03-2013.The apex court held that –
Quote – “In view of the plain language of the above reproduced provision, (Of Gratuity Act -
1972) which contains a non-obstante clause, every eligible employee is, notwithstanding
anything inconsistent contained in any other enactment or instrument or contract is entitled
to gratuity. Therefore, even if the respondent had opted for pension, he could have
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
legitimately claimed gratuity without being required to refund the amount of pension already
received by him.”“In the result, the appeal is dismissed. The appellant is directed to
implement the order of the High Court within a period of eight weeks from today.”
e. From amongst the senior unsung heroes (Retirees of Pre-86 periods) - Sh Shapoor
M Mehta of Bombay and Sh. Shridhar N. Indurkar of Nagpur, whose pensions were also
stopped, filed WP in 2011 in High Court of Bombay and at Nagpur. These were decided in
favour of these veterans, but as usual Bank filed Appeal No. SLP(C) 7429/2012 & 9665/2012
in Supreme Court and on the basis of judgment in case of A.C. Aggarwal, Supreme Court
dismissed both the appeals of Bank on 18/04/2013.
f. The All India Allahabad Bank Retired Employees Association (Started By Late Sh.
Jaigovind Rai who had started this fight of Gratuity) had also filed WP No. 961 of 2011 in
High Court Lucknow for quashing the banks circular of stopping payment of Old Pension. The
W.P.was allowed on 10.04.2013 on the basis of case law of 13.03.2013, by Supreme Court in
case of A.C. Aggarwal. The order of HC Lucknow was as under -
“The impugned circular dated 30.3.2010 insofar as it relates to discontinuation of pension
under the Old Pension Scheme from October, 2010 onwards and to recover the aggregate
amount already paid under the scheme is hereby quashed. Respondent-Bank is directed to
pay regular monthly pension to the members of the petitioner's association as is being paid
to all other employees of the Allahabad Bank from October, 2010 onwards.”
I am putting up the history of the fight of our seniors, with a view to make
all understand that Bank has not easily given even to the very limited pension to a
limited number of old pensioners.
Still there were advices from legal department that Bank should go in for
appeal in Supreme Court against the order of Lucknow High Court. The law
department of Bank was of the view that the orders of Supreme Court in cases of
A.C. Agrawal, Shapoor M Mehta and Shridhar N. Indurkar, were complied with and
there was no order from Supreme Court to pay pension all other similarly placed
old pensioners. It was only by High Court of Lucknow for all such pensioners &
appeal can be filed in Supreme Court against the order of H.C. Lucknow.
One can easily visualize the darkest side of the officers sitting at the helm of
affairs in Bank.
The matter came up for discussion in the board meeting at Bhubaneshwar on
28.06.2013. By that time Chairperson and Managing Director Mrs. Shubhalaxmi Panse had
taken over. It is said that prior to her becoming Chairperson and Managing Director of the
Bank, there was contempt proceedings in Lucknow Bench of Allahabad High Court against
Mr. Dua - Former CMD of the Bank. Probably the fear of possible contempt of court
particularly when similar three cases had been decided by Apex Court of the country, had
influenced and also good sense prevailed upon the CMD and the move of going again in
Supreme Court was not accepted.
g. Thus Bank had to pay both Gratuity & Pension to the eligible retirees of Old Pension
Scheme. The gratuity was paid on 1.11.2010, old pension was stopped from 1.10.2010 to
30.6.2013 and the arrears were paid on 03.07-2013. Now old pension is being paid from July
2013 onwards regularly, but the survived old Pensioners as on 31.10.2016 were just 104.
The biggest question on attitude of Banks towards the very old pensioners remains
un-replied. The stopping the bare minimum pension for a period of almost three years is
nothing but being inhuman. The bank might have not paid any interest on arrears of these
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
old pensioners as there was no order by High Court of Lucknow. But there was order of
Interest in case of A.C Aggrawal by Delhi High Court and Supreme Court Ordered the Bank to
comply with the order of Delhi High Court. Thus Sh. A.C Aggrawal received arrears of
pension with interest.
Now I am of the view that we should not let the Bank go free on this count.
There are sure chances of getting the interest on Delayed Payment of Gratuity to
these old Pensioners. Pensioners got the Gratuity only on 1.11.2010, and they were
entitled for interest on Gratuity amount as per Section 7(3A) of Gratuity Act-1972,
for the period of delay. This delay period is in years. The delay period was from the
Date of retirement to 1.11.2010, when gratuity was actually /finally paid to the
retiree by the Bank.
The delay Period will be counted for every such pensioner who has received Gratuity
refunded by Bank on 1.11.2010. The period will be different for every pensioner and it will be
for the period “From Date of Retirement to 1.11.2010.”
I have calculated the interest payable to them from their respective date of retirement
till 1.11.2010 when Gratuity was actually paid @ 10% Per Annum. The delay period ranges
from 35 years to 16 years. The amount of Interest so payable to 169 old pensioners is
calculated to be Rs.113.63 lacs till 31.10.2010.
We must not leave the case of Interest on Gratuity to other category of Pensioners
also, whose pension was stopped after paying them gratuity on 1.11.2010. Such number is
approx. 350, mostly those who retired under VRS-2000 Scheme in 2001 and were being paid
old pension. This number is approx. 275 and approx.75 pensioners are those who retired on
superannuation with Old Pension. Total interest due from Bank to these 350 Pensioners is
Rs.1684.25 lacs as under -
The gratuity ceiling was Rs.3.5 lacs for these retirees. For VRS 2000 Scheme Retirees
it has been taken at average of Rs.2.75 lacs on account of lower length of service rendered
by them.
Amount in Lacs of Rs.
Category Number Intt Up to 31.10.10 Further Intt Total Intt
VRS 2000 275 712.14 498.49 1210.63
Normal 75 278.60 195.02 473.62
Total 350 990.74 693.51 1684.25
For Pre 86 169 113.63 79.54 193.17
All 519 1104.37 773.05 1877.42
Thus 519 old scheme pensioners, who were paid gratuity on 1.11.2010, are eligible to get
interest of Rs.18.77 Crores as per Gratuity Act-1972. It will come to them only by finally
concluding the battle started by Late Sh. Jaigovind Rai- Our most respected leader of
Allahabad Bank.
S.K.MISHRA – BHOPAL – 08-07-2017
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Dear Friends, Bhopal – 12-07-2017
I am inviting your attention to the following matter and request you to please study &
convince the leaders of our association to think on the taking suitable action.
Yours
S.K.MISHRA
BANK HAD TO PAY BOTH – PENSION & GRATUITY WITH INTEREST
TO PENSIONERS OF OLD SCHEME
BACKGROUND –
a. Bank used to get back the gratuity from retires for payment of Pension under old
pension Scheme.
b. Even after enactment of Gratuity Act 1972, which imposed the Statutory Obligation
upon the Bank to pay Gratuity as per Act, the bank continued the same system of
getting back the gratuity for payment of Old Pension.
c. In the year 1986 All India Allahabad Bank Retired Employees Association, filed Writ
Petition in High Court of Lucknow, seeking order from High Court to the bank for
payment of Gratuity also as per Gratuity Act-1972 to all those who were being paid
old pension. The case was decided in favour of pensioners. Bank filed SLP in Supreme
Court, against the order of High Court of Lucknow. On 29-01-2010, Supreme Court
held that as the Bank has not got exemption for payment of Gratuity from the
Competent Authority, hence Bank must pay the gratuity. The summary order is
reproduced for the knowledge of all those who were declared eligible for such payment
of Gratuity.
Quote -
“Judgment is, however, applicable to all the members of the Petitioner's
Association/Pensioners in the respondent-Bank governed by the Pension
Regulations (old) 1890 of the Bank as well as those pensioners who retired
during the period 1.1.1986 to 31.10.1993.
It is made clear that such of those officers of the Bank working prior to
1.7.1979 and have retired after coming into force of the said Act on 31st
October, 1993, shall alone be entitled for the benefits.”
d. After the said order Bank paid the Gratuity to Pensioners under old scheme, but
stopped payment of Old Pension. One of Pensioner Sh. A.C. Aggarwal had already filed
the WP in High Court Delhi, which was finally decided by Supreme Court (Civil Appeal
No. 9024 of 2012 - Allahabad Bank vs. A.C. Aggarwal) on 13-03-2013, and it was held
that Gratuity and Old Pension, both the benefits are payable to eligible retired
employees/officers of the Bank retired during periods as above in RED.
Thus Bank had to pay both - Gratuity & Pension to pensioners of Old Scheme.
QUESTION OF INTEREST ON DEALYED PAYMENT OF GRATUITY-
A. Now some of these Pensioners, who were paid gratuity in compliance of Supreme
Court Judgment dated 2-01-2010 , by the Bank probably on 01-11-2010, have put
their claim for payment of interest on delayed payment of Gratuity.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
What Delay - Example - One who retired on 30-04-2001, and was getting old
pension (Although had in 2001 refunded the gratuity as per bank’s requirement) was
paid the Gratuity in compliance of Supreme Court Judgment, on 01-11-2010. Now he
has claimed interest on delayed payment (Delay from date of Retirement to payment
on 01-11-2010) almost 10 years. The Interest Amount to this one is Rs.3.5 lacs.
Obviously Bank has rejected their claim. These pensioners have adopted the
Statutory Route of presenting their case before the Competent Authority
under the Gratuity Act -1972.
B. What is your reaction on possible success of such claim of interest on
Gratuity paid on 01.11.2010 to old pensioners?
The old pensioners, who were paid the Gratuity as above on 01.11.2010, are
the workman cadre retirees of the period from 1.1.1986, and officers in
service prior to 1.7.1979 and were paid old pension after retirement. The
number may approx.500, including those who switched over from Old
Pension to New Pension under Second Option in the year 2010.
C. The Statutory Route has been adopted by some 16 such retirees of our bank and
payment of interest for delay on payment of gratuity has been ordered by following
authorities -
1. Controlling Authority under Payment of Gratuity Act 1972 & Asstt. Labour
Commissioner (Central), Dehradun – By Order No.D-36(13)/2015-ALC dated 4-
12-2015.
2. Appellate Authority Under Payment of Gratuity Act 1972 & Dy. Chief Labour
Commissioner (Central) Derhadun -By Order No.D-36(25)/2016/Dy.CLC dated
23-01-2016
D. Now keeping in view that for compliance of above order of the Appellate Authority
under Payment of Gratuity Act 1972, Bank is required to pay approx. Rs.50 lacs as
interest to those 16 only. What could be the interest amount involved for all such
approx. 500 pensioners can easily be visualized. Therefore and obviously Bank has
filed appeals in High Court.
We are now to decide the action that may be taken by our Association to get the justified
dues of these pensioners, most of them may be in the age group above 80 + years. I am
of the strong view that Association should become intervener in the case to represent all
such deprived pensioners and get justice to them.
With best wishes to all those, who are fighting the case,
Yours
S.K.MISHRA – BHOPAL 12-07-2017
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
HISTORY OF LABOUR MOVEMENT & MINIMUM WAGE/PENSION CONCEPT
ROOTS OF LABOUR STRUGGLE
The struggle of workers whose livelihood is solely depending upon the wages paid by
employers, find its roots in the French Revolution. The French Revolution was a period of far-
reaching social and political upheaval in France that lasted from 1789 until 1799. The modern
era has unfolded in the shadow of the French Revolution. Almost all future revolutionary
movements looked back to the Revolution as their predecessor. Globally, the Revolution
accelerated the rise of republics and democracies. It became the focal point for the
development of all modern political ideologies, leading to the spread of liberalism, radicalism,
nationalism, socialism, feminism, and secularism, among many others.
Many historians were saying that the field of the French Revolution was in intellectual
disarray. The old model or paradigm focusing on class conflict has been discredited, and no
new explanatory model had gained widespread support.
Some historians argue that the French people underwent a fundamental transformation in
self-identity, evidenced by the elimination of privileges and their replacement by rights as
well as the growing decline in social deference that highlighted the principle of equality
throughout the Revolution.
Throughout the 19th Century, the revolution was heavily analysed by economists and
political scientists, who saw the class nature of the revolution as a fundamental aspect in
understanding human social evolution itself. This, combined with the egalitarian values
introduced by the revolution, gave rise to a classless and co-operative model for society
called "socialism" which profoundly influenced future revolutions in France and around the
world.
HISTORY OF UNITED LABOUR MOVEMENTS
“Labour has been central to the modern globalization process. From issues of
the embodied movement of workers to the emergence of a global division of labour,
and organized responses to capitalist relations of production, the relevance of
labour to globalization is not new, and it is far more significant in shaping the world
than is usually recognized.”
In Europe, the labour movement began during the industrial revolution, when
agricultural jobs declined and employment moved to more industrial areas. The idea met
with great resistance. In the early 19th century, groups such as the Tolpuddle Martyrs of
Dorset were punished and transported for forming unions, which was against the laws of the
time.
Labourism was active during the early to mid 19th century and various labour parties
and trade unions were formed throughout the industrialised parts of the world. The
International Workingmen's Association, the first attempt at international coordination, was
founded in London in 1864. The major issues included the right of the workers to organize
them-selves, and the right to an 8-hour working day. In 1871 workers in France rebelled and
the Paris Commune was formed. From the mid-nineteenth century onward the labour
movement became increasingly globalized.
The movement gained major impetus during the late 19th and early 20th centuries
from the Catholic Social Teaching tradition which began in 1891 with the publication of Pope
Leo XIII's foundational document, Rerum novarum, also known as "On the Condition of the
Working Classes," in which he advocated a series of reforms including limits on the length of
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
the work day, a living wage, the elimination of child labour, the rights of labour to organize,
and the duty of the state to regulate labour conditions.
Throughout the world, action by labourists has resulted in reforms and workers' rights,
such as the two-day weekend, minimum wage, paid holidays, and the achievement of the
eight-hour day for many workers. There have been many important labour activists in
modern history who have caused changes that were revolutionary at the time and are now
regarded as basic. For example, Mary Harris Jones, better known as "Mother Jones", and the
National Catholic Welfare Council were important in the campaign to end child labour in the
United States during the early 20th century.
HISTORY OF LABOUR/TRADE UNION MOVEMENT IN INDIA
The setting up of textile and clothing mills around the port cities of Bombay, Calcutta,
Madras and Surat in the second half of the 19th century led to the beginnings of the
industrial workforce in India. Several incidents of strikes and protests by workers have been
recorded during this time. The credit for the first association of Indian workers is generally
given to the Bombay Mill-Hands Association founded by N.M. Lokhande in 1884.
This was in the period just after the passing of the 'First' Factories Act in 1881 by the
British Government of the time. The following years saw the formation of several labour
associations and unions. The first clearly registered trade-union is considered to be the
Madras Labour Union founded by B.P. Wadia in 1918, while the first trade union federation to
be set up was the All India Trade Union Congress in 1920.
Following the rapid growth of unions around the time of the First World War, the
Russian Revolution and the setting up of the ILO - industrial conflict began to increase and
over 1,000 strikes were recorded between 1920 and 1924. The waves of strikes boiled over
with the arrest of prominent leaders and trade-unionists in the infamous 'Cawnpore
Conspiracy case' in 1924 with the union leaders being arrested and accused of attempting a
Communist revolution to try and overthrow the ruling British Government. Subsequently, the
Trade Union Act (1926) was passed which created the rules for the regulation and closer
monitoring of Trade Unions. In the first year of the law's operation, 28 unions registered and
submitted returns with a total membership 100,619. The number of unions grew rapidly after
that and by the time of Independence of India in 1947, there were 2,766 unions registered
which had a combined membership of over 1.66 million. This resulted in a wide influence of
unions and workers' organisations and led to significantly favourable social legislation being
enacted in the first decade of Independence. Several important labour laws were passed
during this time.
AFTER INDEPENDENCE TO LIBERALISATION
Following its Independence in 1947 and the formation of the Republic in 1950, India largely
followed a Socialist economic approach encouraging public sector employment and pro-
worker legislations. The trade-union movement reflected the main political divisions of the
time and was divided mainly along Socialist and Communist lines. The subsequent decades
saw significant expansion in trade union membership with the number of active unions
reaching its peak in the mid-1970s and mid-1980s. While the 1970s in India was a period
characterized by political instability, the 1980s was characterized by the beginnings of a
distinct turn towards more market-friendly policies, support for industrialists and an implicit
opposition to workers. Two key events during this period were the 1974 railway strike in
India and the Great Bombay textile strike of 1982, the latter of which subsequently led to a
long and complicated stalemate. The period following the Economic liberalisation in 1991 was
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
characterized by declining government intervention in the economy, a decline in the creation
of public sector employment and encouragement for the private sector. Efforts for
unionization in the private sectors were often met with opposition and the wider general
withdrawal of State support for workers further undermined their bargaining power. These
policies led to stagnation in the number of unionized formal sector workers.
Source - Wikipedia
CONCEPT OF MINIMUM WAGES FOR WORKERS
The above history of process of labour unification and simultaneous development of
civilized society brought many reforms for workers' rights, such as eight-hour day, weekend
holiday, paid holidays, minimum wage, etc. In our country also the process of reforms for
workers' rights continued to be focus of Trade Unions and Government brought in the same.
At the 15th Session of the Indian Labour Conference held at New Delhi in July 1957, an
important resolution was passed, which laid down that the minimum wage should be
need-based and should ensure the minimum human needs of the industrial
worker. The following norms were accepted as a guide for all wage- fixing authorities
including Minimum Wage Committees, Wage Boards, Adjudicators, etc.
The Union Labour & Employment Minister Shri Mallikarjun Kharge has informed the
Rajya Sabha that the norms recommended by the Indian Labour Conference (ILC), held in
1957 are taken into account while fixing the minimum wages. These are as follows:
(i) In calculating the minimum wage, the standard working class family should be taken
to comprise three consumption units for one earner, the earnings of women, children
and adolescents being disregarded.
(ii) Minimum food requirements should be calculated on the basis of a net in take of 2700
calories, as recommended by Dr. Akroyd for an average Indian adult of moderate
activity.
(iii) Clothing requirements should be estimated on the basis of a per capita consumption of
18 yards per annum, which would give for the average workers family of four a total of
72 yards.
(iv) In respect of housing, the norm should be the minimum rent charged by Government in
any area for houses provided under the Subsidised Industrial Housing Scheme for
low income groups ; and
(v) Fuel, lighting and other miscellaneous items of expenditure should constitute 20 per
cent of the total minimum wage. The Resolution further laid down that wherever the
minimum wage fixed was below the norms recommended above, it would be incumbent
on the authorities concerned to justify the circumstances which prevented them from
adherence to the aforesaid norms. The Resolution, thus, tried to give concreteness to
the whole concept of minimum wage.
**In 1991, the Supreme Court in its judgment expressed the view
that children’s education, medical requirement, minimum recreation, including
festivals ceremonies, provision for old age and marriage should further constitute
25 per cent and be used as a guide for fixing the minimum wage.
MINIMUM WAGES FOR INDUSTRIAL WORKERS CALCULATED AS PER NORMS The
minimum wage norms as per (ILC), of 1957 have been taken care of by the Central
Government in Pay Revisions of Central Govt. employees. In the recent 7th Pay Commission
report the concept has been applied. For the purpose of calculation of Minimum Wage at CPI
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
level of June -2017, the prices as on 01.01.206, taken in 7th Pay Revision have formed the
base for the following calculations.
CALCULATED MINIMUM WAGE FOR INDUSTRIAL WORKER -
Based On Prices Taken In 7th Pay Commission as on 01.01.2016
Pay Calculated On The Norms For Minimum Wages Fixed Based On ILC Norms (1957)
Item In Units of Gms,Kgs, ml, Number Per Day PCU
P.M.3 CU(in Kg)
Price per Unit
Costs Total cost PM Rice/Wheat = Gms 475 42.75 25.93 1108.51 1108.51
Dal- Toor/Urad/Moong = Gms 80 7.2 97.84 704.45 704.45
Raw Veg = Gms 100 9 58.48 526.32 526.32
Green Leaf Veg = Gms 125 11.25 38.12 428.85 428.85
Other Veg - Onion,Potato,Tomato = Gms 75 6.75 32.80 221.40 221.40
Fruits = Gms 120 10.8 64.16 692.93 692.93
Milk = ml. 200 18 37.74 679.32 679.32
Sugar/Jaggery = Gms 56 5 37.40 187.00 187.00
Edible Oil = ml 40 3.6 114.02 410.47 410.47
Fish for 3 Members = Kgs 2.5 268.38 670.95 670.95
Meat for 3 Members = Kgs 5 400.90 2004.50 2004.50
Egg = Number 1 90 4.27 384.30 384.30
Detergents/Soaps- Bath & washing , etc Per Month 291.31 291.31 291.31
Clothing for 3 Members PM = Meters $ 5.5 164.88 906.84 906.84
Sub Total - A 9217.15
Add Misc. @ 20% * * 20% of Sub Total - A 1843.43
Sub Total - B 11060.57
Add Exp @ 25% ** As per S.Court-1991 ** 25% of Sub Total - B 2765.14
Sub Total - C 13825.72
Housing *** - 10% of monthly expenses *** Grand Total Less Sub Total - C 1536.19
Grand Total $$ $$ Sub Total- C, Divided By 0.9 15361.91
Step Up 125 % On Present Level $$ $$ At Level of CPI Compared to 19202.39
that of 1.1.2016 – 7th Pay Commission Rs.19200
PCU = Per Day Consumption Unit
3 CU = Three Consumption Unit
The normative family is taken to consist of a spouse and two children below the age of 14.
With the husband assigned 1 unit, wife, 0.8 unit and two children, 0.6 units each, the
minimum wage needs to address 3 consumption units.
$ = Clothing as prescribed is 70 yards per year. This will work out to 5 mtrs per month
and the costs include the ancillary charges like stitching etc.
* = 20% miscellaneous charges towards fuels, electricity, water, etc
** = Additional Expenses @ 25% includes expenditure towards education, medical,
treatment, recreation, festivals, etc, as per Supreme Court decision in 1991
*** = Housing is Grand Total Less Sub Total - C, As per ILC Norms
$ $ =Total Cost = Sub Total Divided By 0.9 as per 15th ILC Norms
Hence the minimum wage is calculated to be Rs.19200/ that is Basic Pay applicable
to the rank of sub staff employee as on 1.1.2016 for three members of his family,
including him.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
After considering all relevant factors in 7th Pay Commission minimum pay of employee in
Central Government is at Rs.18000/- per month plus Grade Pay of Rs.1800/- Total
Rs.19800/-, w.e.f. 01.01.2016, is fair and reasonable. Our calculation at Rs.19200/- is thus
very much reasonable keeping in view the minimum pay taken in 7th Pay Commission.
COMPARISION OF PAY OF SUB-STAFF OF BANK IN JAN-16 WITH
MINIMUM PAY IN 7TH PAY COMMISSION AS PER NORMS OF ILC
The bank employee of the level of sub-staff at the very start of Basic Pay should be
Rs.19200/- on 1.1.2016. But as per10th Bipartite Settlement the Basic Pay of Sub- Staff at
start of Basic Pay is Rs.9560/.In Jan-2016 the DA payable was 39.8% that gives total Pay
of Rs.13364.88. This is calculated to be just 67.5% of that of minimum in Central Govt. in
Jan-2016.
CONCLUSION-
The Pay Scales for Bank employees are while not in line with 15th ILC Norms,
resultantly the Pension to bank pensioners is also far below the minimum subsistence
required to ensure a normal standard of living for the lowest ranked employee in the Central
Government. The limits fixed for family pension does not permit even normal livelihood to
Bank Pensioner’s families. The minimum & maximum limits fixed on family pension of Bank
Pensioners are as under –
Family Pension of Retirees of Min. Basic Pension Max. Basic Pension
1.1.1986 to 31.10.1992 Rs.600 Rs.1250
1.11.1992 to 31.3.1998 Rs.1150 Rs.2400
1.4.1998 to 31.10.2002 Rs.1687 Rs.3521
1.11.2002 to 31.10.2007 Rs.2292 Rs.4784
1.11.2007 to 31.10.2012 Rs.2841 Rs.5930
1.11.2012 to 31.10.2017 Rs.4448 Rs.9284
Thus as on 1.1.2016 the minimum & maximum family pension to Bank employee
retired after 31.10.2017 were as under-
Family Pension In Jan-2016 Basic Pension DA 39.8% Total Pension
At Minimum- Basic Pension Rs.4448 Rs.1770.30 Rs. 6218.30
At Maximum Limit of Basic Pension Rs.9284 Rs.3695.03 Rs.12979.03
The family pension of earlier retirees from 1.1.1986 is lower than shown above. The
Family Pension to the top executive– General Manager is Rs. 12979. 03, but the minimum
family pension of the lowest paid retiree of Central Govt. is Rs.9000/ in Jan-2016 as per 7th
Pay Commission. Thus while pension to Bank Pensioners is much low even below the
minimum subsistence required for very normal livelihood, other irony of the fate is that the
pension for top executive– General Manager of Bank if retired before 1.1.1986 was Rs. 3455/
and family pension was just Rs.1728/- in Jan-2016. At present for the month of July-2017 it
is Rs.3701 and Rs.1850/- respectively. as IBA CIR/HR & IR/D/G2/2016-17/1998 dated
01.02.2017.
The Bank pensioners are demanding pension updating but on plea of resultant
increased load on Banks, these are not even discussed either at Govt. level or at IBA level.
The Associations of Bank Pensioners have not lost hopes and trying to get the demand
accepted by Govt. & IBA.
S.K.MISHRA – BHOPAL – 15-07-2017
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Dear Friends, 16-09-2017
HISTORY OF DELAYING DUES OF THE PENSIONERS BY BANKS
The Supreme Court had on 20-7-2017, decided the issues of benefit of Reg-26 to specialist
retired officers of bank. A good number of representations have reached Head Office and the
eligible officers are anxious to know the development. As you are aware the Case was linked
with case of Bank of Baroda. Both the Banks filed Review Petition and were dismissed. The
decision for payment of benefit to pensioners is not yet taken by Bank.
But we should not forget that it is not the first time that Banks are delaying the due
payments to retirees/pensioners. During past settlements from 5th to 10th every time
retiree/pensioners have been subjected to such acts by way of joint notes that created
circumstances warranting legal recourse by retirees and Banks got the opportunity to drag
the matters in courts for years together.
The question arises why so?
The banks are doing business of interest earnings. This basic and foremost objective is to be
achieved by them. The acts are of indication that Banks are religiously working on their main
objective of earning interest may be by the above modous that hurts their own retired
employees. This may be for the reason that these retirees are of no more use to Banks.
Here are all the EIGHT Such examples. Please study and do not forget the history that the
legitimate dues could be earned by the retirees only through Courts.
1. In 5th Bipartite the Pay Scales were made effective from 01-07-1993, the Gratuity
Calculations based on revised Pay was made applicable only for the employees who retired
on or after 1-11-1994. Thus those who had retired between 1-7-1993 to 31-10-1194, the
calculation of gratuity was done on old pay scales and thus they were not paid difference of
gratuity amount. The matter was decided by Supreme Court on 29-3-2017 in favour of
retirees.
2. The 6th Bipartite was to expire on 31-10-1997 but it was made effective from 1.4.1998. Thus
pensioners retired during 1-11-97 to 31-3-1998 were at loss, in respect of Basic Pension.
None of the retirees or pensioner fought against above injustice and Banks were benefitted by
paying lower pension to the approx. 5000 retirees of the period from 1-11-1997 to 31-4-
1998.
3. In 7th Bipartite the Basic Pay for the pensioners was accepted at 1616 CPI where as the Pay
revision was at 1684 CPI. Thus employees retired during the period were given lower Basic
Pension at around 41% instead of 50% of Basic Pay. Matter is pending in Supreme Court.
4. During the block period of this settlement the SVRS -2000 Scheme was offered by Banks and
approx 80000 employees retired under VRS 2000 scheme during the year 2001. Banks
subsequently amended Pension Regulation-28 and denied benefit of Reg.29 (5) to VRS
Pensioner. Supreme Court on 27-03-2009 decided the issue of Reg.29 (5) in favour of
pensioners.IBA filed Review Petition No. 1112/2009 on 28-4-2009 which was dismissed on
12-8-2009.IBA in the Month of August 2009, issued circular to all banks to follow the apex
court order. But Vijay Bank & Allahabad Bank filed SLPS in Supreme Court. These had also
gone against Banks and it was only after order of Supreme Court, Allahabad Bank and Vijaya
Bank passed on the benefit of Reg.29 (5) to VRS pensioners in March-April 2014. Pensioners
of State Bank of Mysore and State Bank of Travancore has not yet got the benefit of Reg29(5)
as both the banks are delaying by dragging the appeals in Supreme Court.
5. 8th Bipartite – Here 100% DA neutralization was given to employees and retirees retired after
1-11-2002, but all existing pensioner prior to that date continued to at tapered DA rates. The
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
matter is pending in Supreme Court, though judgment is reserved on 01-08-2017, but wait is
continuing.
6. In 9th Bipartite – Second Pension Option was given to CPF opted retirees also. In actuarial
valuation of pension liability, the calculations were for CPF optees in reference to data &
number of such retirees as on 31-03-2008. The estimated required funds as on 31-3-2008,
was 156% of CPF amount of these retirees. Retirees were made to contribute 156% for the
required fund. But they were paid pension from 27-11-2009, instead from 1.4-2008. Thus all
these were put to Loss of Pension of 20 months & decreased commutation amount to the
retirees of this period (1-4-2008 to 26-11-2009).
7. Further in this settlement as per Joint Note the second option was for all retirees, but IBA by
inserting the word “Retired On Superannuation” in its circular to Banks created the scope to
Banks for denying to other types of retirees. The Voluntarily Retirees had to go to courts and
they could get the chance by orders of the courts only. But the second option to compulsorily
retired officers had not yet been given as a matter of rule.There are judgments by Supreme
Court
8. In 10th Bipartite- The salary revision was made with a new concept of increase in pay packet
by 15%. All felt that it is good. But the increase in Basic Pay was just 3.23% (Merger of DA &
Increase of 2% on it), for the purpose of Pension. The special allowance was not counted for
Pension. Thus in this settlement employees were also subjected to curtailment in pension
benefits.
I had gone in a bit details of Bank’s actions on the above, to point out that despite Apex
Courts Orders, all Banks dragged the matter for years just to earn profits from the unpaid
dues of old pensioners. With this attitude IBA/ Banks have ditched the retirees in every
settlement and due benefits could be earned through courts only but with much delay, and in
the meantime Banks earned profits from the unpaid dues of pension of these retirees.
Now about the Review Petition by BOB & Allahabad Bank in Reg-26 Matter-
As a legal right & remedy available to banks the Review Petition in Supreme is last recourse.
The review petition is first submitted to Registrar of the Supreme Court. The registrar
registers it and allots a number. It may take 1-2 months. Thereafter the registrar prepares
the office report & submits before the court judges to get the date. Generally the chamber
hearing is done in such Review Petitions and in case there is any conflicting law point in the
earlier judgment it is fixed for further notice to the parties, otherwise it is dismissed in
chamber hearing itself.
In the matter of Benefit of Regulation 29(5) to SVRS retired pensioners the Supreme Court
had decided the issue on 27-03-2017. IBA had filed Review Petition on 28-04-2009; it was
Registered On 14-07-2009 and was Dismissed On 12-08-2009.
So please wait for the usual time. But banks are succeeding in detaining the due amounts of
crores of rupees of pensioners and earning out of it in line with the objective of Bank
business.
Yours
S.K.MISHRA –BHOPAL – 16-09-2017
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Dear Friends, 30-09-2017
Need of United Legal Efforts for Getting Justice to Bank Pensioners
Several dues were curtailed /denied to the Pensioners, by IBA/ Banks during last
Bipartite Settlements. Individuals adopted the legal routes. The justice could be achieved
only through the apex court - the Supreme Court. But despite the judgments by Supreme
Court the Banks had not followed the judgment as applicable to all similarly pensioners/
retirees. The examples are –
1. In the matter of benefits of Reg-29(5) to Special VRS – 2000, pensioners were denied.
After the favorable judgment dated 27-03-2009, by Supreme Court t in Civil Appeals No
1942 -1957 of 2009, filed by five Banks, the IBA filed Review Petition. This Review Petition
was dismissed and IBA issued circular to all banks to pass on the benefit to pensioners.
But Allahabad Bank and Vijaya Bank continued the Appeals. The pensioners of Allahabad
bank & Vijaya Bank were given the benefit only in 2014 when another order was passed
by Supreme Court. It is to bring to knowledge that State Bank of Mysore has not given the
said benefit as yet and the appeals by this bank are still pending in Supreme Court for the
reason that a large number of individual pensioners had adopted the legal route and this is
taking time.
2. The eligibility for Second Option to Compulsorily Retired Officers of Banks has been
decided by Hon’ble Supreme Court in cases against Andhra bank (SLP No. 35449/2013
decided on 5-9-2015) and Punjab & Sind Bank (SLP No. 8506/2016 decided on 13-04-
2016). But these two banks have given chance of Second Option only to the individuals
who were in Supreme Court. All similarly placed retired officers are denied the chance by
all the Banks. As much as six high courts have also adjudged the matter in favor of such
officers, but no bank has yet given chance of Second Pension Option to Compulsorily
Retired Officers.
3. In 7th Bipartite Settlement it was decided that the Basic Pay for pension purpose would be
at the pre-revised pay and the dearness allowance thereon calculated at 1616 CPI. Thus
pension fitted was lower than should have been as the Pay Revised at 1684 CPI.
Resultantly the employees retired during that period were given lower Basic Pension at
around 41%, instead of 50% of Basic Pay. Total adversely effected pensioners were
around 1.05 lac, including approximately 0.80 lac SVRS 2000 Scheme, retirees.
In this matter, a large number of Writ Petitions were filed in High Courts in Southern
India, during 2000 to 2002 by pensioners individually. Most of these were decided in
favour of pensioners, Banks filed appeals in Supreme Court. The Matters is still undecided
for 16 years. The only reason appeared is, very large number of Writ Petitioners in
individual capacity.
CAUSES OF DEALY - As per court procedure, the notices are issued to all respondents (In
above cases the 713 individual pensioners), service of notice is recorded, their replies are
awaited and received/recorded in cases, where after, counter–reply by appellants are
received & recorded. After completing the said process, the dates for arguments are fixed
and heard from each side. One can imagine how long should it take for 713
respondents. The result is that the matter is still not finally decided.
From the facts as above, it should be understood that the matter of common cause of the
Bank Pensioners & Retirees must be taken up by a group formed as Registered Body
or Union or Association of Pensioners. Here only the registered body will represent for
all the similarly placed pensioners / retirees in the court and benefit will come to all.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
It is also a fact that till date in all the disputed/denied pension benefits, the individuals
have approached the courts. But in the extra enthusiasms by some of the groups as
individuals, they have filed the Writ Petitions in a large number and that had
delayed the process of getting early justice from the court of law.
4. Now take the example of case of 100% DA neutralization to pre-Nov -2002 retired
pensioners. Some individuals filed the Writ Petitions in High Court of Madras. The single
judge bench decided in favour of pensioners, but Division Bench reversed the order. The
individuals filed SLPs in Supreme Court, which were dismissed in Feb-2017. But
fortunately the formal united group in the name of United Bank of India Retirees Welfare
Association had also filed the WP in Calcutta High Court. This case came up at Supreme
Court level where Retired Bank Officers National Confederation, Association of Retired
IOBs’ Employees and All India Bank Retirees Federation have become the impleaders. This
has helped all the retirees with availability of very experienced advocates and the now the
judgment is reserved. The judgment will be applicable to all pensioners by virtue of the
Fact that Associations of Retirees and Pensioners are now party in the case.
In present days pensioners & retirees have opportunity of becoming members of All India
Pensioners/Retirees Associations of individual banks (Public Sector Banks). The pensioners
can now impress upon their Associations to be the party in court cases of common cause.
Hope pensioners /retirees will understand the benefit of unity under Associations.
List of mentioned 713 Appeals pending in Supreme Court is also given.
Yours
S.K.MISHRA – BHOPAL - 30-09-2017
LIST OF APPEALS PENDING IN SUPREME COURT
IN THE MATTER OF LOWER PENSION AT 1616 CPI APPEAL NUMBERS
By BANKS No of Appeals
C.A. No. 005525 / 2012 BANK OF BARODA 1
C.A. No. 005611 / 2012 BANK OF BARODA 1
SLP(C) No. 020661 - 020668 / 2012 CANARA BANK 8
SLP(C) No. 012038 / 2013 CANARA BANK 1
SLP(C) No. 031470 - 031474 / 2012 INDIAN OVERSEAS BANK 5
C.A. No. 003257 - 003262 / 2013 STATE BANK OF MYSORE 6
C.A. No. 011205 - 011340 / 2014 STATE BANK OF MYSORE 136
C.A. No. 011342 - 011435 / 2014 STATE BANK OF MYSORE 94
C.A. No. 004711 - 004800 / 2014 STATE BANK OF MYSORE 90
C.A. No. 008357 / 2014 STATE BANK OF MYSORE 1
C.A. No. 009533 - 009649 / 2014 STATE BANK OF MYSORE 117
SLP(C) No. 023777 - 023797 / 2012 SYNDICATE BANK 21
SLP(C) No. 023773 / 2012 SYNDICATE BANK 1
SLP(C) No. 023848 / 2012 SYNDICATE BANK 1
SLP(C) No. 024851 / 2012 SYNDICATE BANK 1
SLP(C) No. 012041 / 2013 SYNDICATE BANK 1
C.A. No. 003026 - 003253 / 2013 VIJAYA BANK 228
TOTAL NUMBER OF APPEALS = 713 TOTAL BANKS INVOLVED - 6 713
S.K.MISHRA – BHOPAL - 30-09-2017
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Whether We Will Ever Care For Paying Capacity Of the People?
‘Government of the people, for the people and by the people’
The Indian Constitution provides a comprehensive framework to guide and govern the
country. The Constitution contains a chapter on the directive principles of state policy that
are in the nature of directives to the Government to implement them for establishing
social and economic democracy in the country. These principles are considered
fundamental in the governance of the country.
The opening and last sentences of the preamble in Constitution: “We, the
people... adopt, enact and give to ourselves this Constitution” signifies the power is
ultimately vested in the hands of the common people.
As spelt out above in constitution, “The Common People” are the “Masters” of
Government & Govt. Employees. The Govt. Employees are public servants, and are paid Pay
& Allowances from the exchequer created mainly by the taxes collected from the “Common
People”. But whether the so called “Master” – “The Common People” have any role in
deciding the payments to these servants, it is a big question. It is said that there is indirect
involvement of the “Common People” in deciding the Pay & Allowances of the Public Servants
through Pay Commissions.
What is a Pay Commission? It is an administrative system/mechanism that is set up
by government of India to determine the salaries of government employees. Every Pay
Commission does its research and then produces its recommendations to the government of
India, which GOI accepts or rejects. Mostly members of Pay Commission are some very
senior government servants, economists, Supreme Court judges and people from different
fields. It does its research on market, inflation, and whole lot of financial things to suggest
salary changes for a particular time-frame.
The First Pay Commission chaired by Shri Srinivasa Varadacharia was constituted in
1946, and since then, every decade commission is setup by GOI to decide the wages of
government employees.
But often the “Paying Capacity” of the “Master” – “The Common People” is ignored,
while suggesting the “Salary Revision”. The Salary Revision has always been aimed at
increase in Pay & Allowances.
Paying Capacity of Master Vs Pay & Allowance of Public Servants
The first pay commission was based on the idea of “living wages” to the employees.
The minimum basic pay for Class IV staff was raised from Rs 10/- to Rs.30/- and for Class III
from Rs 35/- to Rs.60/- per month. The Commission had fixed Rs.55/- as minimum wage
(Rs.30 plus Rs.25 as Dearness Allowance). The recommendations were accepted and
implemented in 1946.
The minimum wages to Govt. Employees in 1946, 1957 and 1986 were Rs. 55/-
Rs.80/- and Rs.750/- respectively, as per Central Pay Commissions recommendations
accepted by Govt.
During the corresponding years the ,Per capita Net National Income at factor cost at
constant prices, was Rs.7513 in 1950-51, Rs.8644 in 1957-58 and Rs.13751 in 1986-87
taking the base year of 2004-05,as reflected in Economic Survey of India report for year
2014-15, released by Ministry of Statistics and Programme Implementation dated 19-06-
2015.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
In Jan-2016, minimum wage is at Rs.19800/ (Rs.18000/ Basic Pay & Rs.1800/ Grade
Pay) as recommended by seventh pay commission & accepted by Govt. The per capita
income for the year 2015-16 was Rs 93393 at prices of 2016.
The minimum pay and per capita income for the earlier corresponding years- 1947,
1957 & 1986 converted at Purchasing Power Parity (PPP) in 2016 and increase so calculated
from 1947 to 2016, from 1957 to 2016 & from 1986 to 2016, clearly speak that the
minimum pay of Govt. employees have been increased disproportionally higher than increase
in Per Capita Income of Indians, during these periods. The following table may be studied
carefully.
INCREASE IN MINIMUM PAY Vs INCREASE IN PER CPITA INCOME IN PURCHASING POWER PARITY TERMS
During Minimum Monthly Pay
Increase Per Capita Income
Increase % Increase in
Period In Year By CPC At PPP in 2016 In PPP Base 2004-05 At PPP in 2016 In PPP Pay to Income
1947-2016 1946 55 5178 382.4% 7114 39434 236.6% 161.63%
1957-2016 1957 80 5760 343.8% 8644 41804 223.2% 154.03%
1986-2016 1986 750 7297 271.3% 13751 51665 180.6% 150.27%
7th CPC 2016 19800 19800 NA NA 93293 93293 NA
Interpretation of Above Comparisons
1. The increase in Minimum Pay was 382.4% and increase in Per Capita Income was 236.6%
during the period from 1947 to 2016.Increase in Minimum Pay was 61.63% extra.
2. The increase in Minimum Pay was 343.8% and increase in Per Capita Income was 223.2%
during the period from 1957 to 2016.Increase in Minimum Pay was 54.03% extra.
3. Similarly during the period from 1986 to 2016 the increase in Pay was 50.27% extra as
explained hereunder -
The minimum pay being Rs.750/- in 1986, is equal to Rs.7297 in PPP terms in Jan-
2016. This is revised to Rs.19800/ for Jan-2016, thus increase in minimum pay in PPP terms
is (19800 divided by 7297) 271.3%, during the period from 1986 to 2016.
The per Capita Income being Rs.13751/- in 1986, is equal to Rs.51665/ in PPP terms
in 2016, thus increase in per capita income in PPP terms is 180.6% (93293 divided by
51665), for the period from 1986 to 2016.
Thus by above Pay Revisions, the increase of minimum pay was 150.27% (271.3%
Divided by 180.6%) of increase in per capita income during the corresponding period.
Thus approx.50% extra increase has been made, in the Salaries of Govt. employees,
in relation to increase in the per Capita Income of India. The paying capacity of the
“Common People” the “Masters” had not been carefully taken into consideration while
increasing the salaries of the “Public Servants”.
It is not the case that the above facts did not come to the notice of the Pay
Commissions. The Seventh Pay Commission, in its report at Para No. 6.2.25 have compared
the GDP per capita in comparable purchasing power parity (PPP) terms, for the year
2014.This comparison was based on the data of the World Bank for the three countries in the
table below.
The pay commission mentioned that the Juxtaposed are the salaries of defence personnel on
an annual basis for the three countries compared. These are based on what has been
reported by IDSA.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Comparison Based on Per Capita Income COUNTRIES
HEAD USA UK India
1.Per capita income Per Annum 54,630 39,137 5,833
2. Pay General/Equivalent 1, 81,500 2, 69,868 1, 40,520
3. Sepoy/ Equivalent 16,992 20,700 16,332
Ratio of Salary to per capita Income
(Row 2/ Row 1) 3.32 6.9 24.09
(Row 3/ Row 1) 0.31 0.53 2.8
Comparison Based on Purchasing Power Parity (PPP) COUNTRIES
Rank USA UK India
General/ Equivalent1 15,125 22,489 11,710
Sepoy/ Equivalent5 1,416 1,725 1,361
The conclusion by the Seventh Pay Commission on above comparisons was as under -
At Para - 6.2.26 - The tables above point to the fact that defence service officers and
JCO/ORs in India, based on VI CPC pay scales, are placed quite well in terms of pay, even in
relation to defence personnel in countries like US and UK, where the GDP per capita in PPP
terms for the country as a whole is significantly higher than that of India - 9.4 times in the
case of US and 6.7 times in the case of UK.
At Para - 6.2.27- These conclusions are equally applicable to Civilian employees who are
similarly placed.
At Para - 6.2.28 - The above analysis does not take into account the augmentation
of pay being recommended by this Pay Commission.
The Seventh Pay Commission has not considered the comparison as per Para 6.2.26
above , which might have lead to a situation where a serious thought warranted for
decreasing the Pay & Allowances of Public Servants in India.
It is worth noting from the above comparison, that in India, the ratio of Pay to Per
Capita Income in case of General or Equivalent is 7.256 times higher & in case of Sepoy or
Equivalent is 9.032 times higher than this ratio in USA. Thus by average, we have been
paying 8.14 times higher Salaries than that in USA to Govt. Employees in relation to
compared Per Capita Income Per Annum in 2014. It must also be noted that GDP of USA was
9.4 times of GDP of India in 2014.
The Pay and allowances to Public Servants being much higher are being tolerated by
the Common Man, in the circumstances where Planning Commission defines the income of
Rs.32/ per day per person as sufficient enough for exclusion from the poverty line. As per
reports of planning commission in the year 2015, based on the said income criteria 26.98
Crores Indians – 21.92% of population of our country were below poverty line.
Analysis of Payment on Pay & Allowances and Pension -
Another data from Seventh Pay Commission Para 2.1.18 gives the expenditure on
pay, on pension and total in percentage terms of GDP of our country for the years 2009 to
2015 as under-
Head Statement (In percentage)Ratio
Year 2009 2010 2011 2012 2013 2014 2015
PAY/GDP 2.05 2.47 2.03 1.94 1.92 1.87 1.88
Pension/GDP 0.84 1.20 1.00 0.94 0.95 0.92 0.92
Total PAP/GDP 2.89 3.67 3.04 2.87 2.86 2.79 2.81
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
The figures of GDP in Rs Crores are also available on the web-site of Planning
Commission for the years 2009 to 2015. I have derived the amounts of expenses on Pay,
Pension & Total (Pay & Pension), on the basis of above percentages. The derived data is as
under-
Head Data Of Pay & Pension Paid, Derived On the Basis of percentage ratio on GDP & GDP in Rs.Cr. Crores Year 2009 2010 2011 2012 2013 2014 2015
GDP Rs Crores 5,630,063 6,477,827 7,795,313 8,974,947 10,159,884 11,355,073 12,876,653
Pay & Allowances
115416 160002 158245 174114 195070 212340 242081
Pension. 47293 77734 77953 84365 96519 104467 118465
Total PAP 162709 237736 236198 258478 291589 316807 360546
At Para 10.1.14 of VII CPC details of Payment on Pension is given for years 2008 to
2014. For the year it is Rs. 104101 Crores , which is 99.65% of derived figure , thus the
derived figures are taken for arriving at the other relevant data of Average Pay & Pension
Per Person Per Year as under-
Average Pay & Allowance Per Employee Per Annum in 2010, 2014 & 2015
Heads Employees In Jan In March
For Year 2010 2014 2015
Number of employees - Lacs 32.31 33.02 32.67
Pay & Allowance Paid Rs Crores 160002 212340 242081
Average Pay & Allowance Per Employee Paid Rs. 495210 643064 741102
Average Pension Per Pensioners Per Annum in 2007 & 2014
Pensioners - As Per VI CPC – In 2007 As Per VII CPC at Para 10.1.18 in 2014
In Year 2007 2014
Total Number of Pensioners -Lacs 38.41 51.96
Pension Paid In Next Year Rs Crores 33823 118,465
Average Pension Paid Per Pensioner Rs. 88,058 227,993
Analysis of Planed Expenditure of Central Government
The emphasis of our Govt. for decades had been for eradication of the poverty and improvement in living standard of the Common Man. The planned expenditure of the Govt. thus must aim to spend more as capital expenditure, which will develop the infrastructures &
consequently will develop economy in a way that facilitates more earning opportunities to Common Man.
The data on planed expenditure obtained from the site of Planning Commission for years
2000, 2005, 2010 & 2015 are as under-
Detail of Central Plan Expenditure as % of GDP at Current Market Prices (12 July, 2014) Rs. Crores
Year GDP of Plan Revenue Plan Capital Total Plan Expenditure As %age of GDP
% of
India (A) Expenditure(B) Outlay(C) Exp.(B+C)= D B to A C to A D to A C to D
2000 2,012,198 38,308 32,012 70,321 1.90% 1.59% 3.49% 45.52%
2005 3,242,209 87,494 44,798 132,292 2.70% 1.38% 4.08% 33.86%
2010 6,477,827 253,884 49,507 303,391 3.92% 0.76% 4.68% 16.32%
2015 12,876,653 453,503 121,497 575,000 3.52% 0.94% 4.47% 21.13%
It is evident that the planned capital outlay which was 45.52% in 2000 has gone down to
21.13% in 2015.The Plan Revenue Expenditure that includes the expenditure on Pay & Allowance have increased from 54.48% in 2000 to 78.87% in 2015.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
REVENUE DEFICIT
Year 2009 2010 2011 2012 2013 2014 2015
GDP at Cu. MP (Rs Cr) 5,630,063 6,477,827 7,795,313 8,974,947 10,028,118 11,355,073 12,876,653
Revenue receipts 540,259 572,811 788,471 751,437 879,232 1,029,252 1,189,763
Revenue expenditure 793,798 911,809 958,724 1,145,785 1243514 1399540 1563611
Revenue deficit 253,539 338,998 276,512 394,348 364,282 370,288 373,848
Plan expenditure 275,235 303,391 373,092 412,375 413,625 475,532 575,000
Non-plan expenditure 608,721 721,096 735,657 891,990 996,747 1,114,902 1,219,892
TOTAL EXPs 883,956 1,024,487 1,108,749 1,304,365 1,410,372 1,590,434 1,794,892
Source – Economic Survey 2013-14 Data Book to PC – Union Budget 2014-15 Page No.25
From The Foreword of Seventh Central Pay Commission Report
At Para 1.6 of the report the Seventh Pay Commission started with following foreword-
“What should be the norms for governance? This has been a moot point through ages and
the norms of the governance have changed from time to time. If we go to the past history of
ancient India, we have many scriptures which have dealt with issues of governance and
those norms are also relevant in the present time.”
“Bhagwat Gita tackles many management issues at the grass root level and offers feasible
solutions on the principles of value-based ethics, enlightened leadership and human quality
development. It says: (Ch. III Karmayoga Shloka 21)”
“Whatever action a great man performs, common men follow and whatever standards he
sets by exemplary acts, all the world pursues”. It is further stated in the Gita that “where
there is Dharma there is victory” or, in other words, success goes hand in hand with
righteousness.
At Para 1.7 of the report the Seventh Pay Commission quoted-
“Chanakya also, in his celebrated discourse “Arthashashtra,” emphasized that the Dharma
Sukti is applicable to both, a ruler and the common man. It is necessary to follow Dharma in
all walks of human life.”
CONCLUSIONS
If derived from the literature of ancient India the norms of the governance
based on the Dharma of the ruler – in present context – Duty of Elected
Government is to ensure that Education, Health Care, Security and Justice is
provided to the Common Man without cost.
Every elected Government lead by any political party had been committing in their
manifesto for betterment of the Common Man, the ground realities are altogether different.
The quality of Education & Health Care provided by Government with very limited resource
provisions has deteriorated to the level that hardly any Govt. Employee prefers Govt. School
for education and Govt. Hospital for health care. It has lead to a situation that education &
health care has become a business in the hands of private players, who are concerned for
the profits and it has gone beyond reach of Common Man. The position of security is now
matter of concern in every State. The justice is getting delayed by decades for the sole
reason that Judiciary is much short of number of judges and required infrastructure.
All it needs more investments & more expenditure in the field of Education, Health
Care, Security and Justice, by Govt. But the expenditure on Pay & Pension does not leave
scope for such investments & Expenditure in terms of Dharma of the ruler.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
The fiscal deficit at average 5% of GDP had always been the main concern of the
Govt. and it can be brought down only by curtailing the revenue expenditure particularly on
Pay & Pension, and making funds available for capital expenditures.
When average annual pay of Rs.741102/- per Servant and on retirement of
the Servant the average annual pension per pensioner is Rs 227993/-how the so
called “Masters” – “The Common Man” now given new name- “The Mango Man” can
get the attention of the Govt. that is expected to be the Dharma of the ruler.
The only way out appears to me is to control the increases in Pay & Pension,
so as to reduce the revenue deficit and have sufficient funds available for the main
four areas Viz. Education, Health Care, Security and Justice in line with directive
principles given in Constitution to the Government & to implement them for
establishing social and economic democracy in the country.
S.K.MISHRA – BHOPAL -15-08-2017- Happy Independence Day
How the Pay & even Pension have reached to Rs in lacs P.M.? Read Next Article
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
HOW PAY OF CENTRAL GOVT. EMPLOYEES INCREASED EXTRA BY 161%
AS COMPARED TO INCREASE IN PER CAPITA INCOME OF
INDIANS DURING 1947 TO 2016.
The Pay of Central Govt. Employees is revised every decade based on the
recommendations of Central Pay Commissions. A noble thinking and ideology always found
place in prefaces and forewords of the Central Pay Commissions, before going for
recommendation of increase in Pay & Allowances of Govt. Employees. Viz-
a. Sixth Pay Commission - The efforts of the Commission have been to devise a suitable
pay package which will not only provide enough incentive to retain the brightest officers
but also attract the best to join it in future.
b. The sixth CPC had at Para 1.2.4, written that a fair comparison based on principles
of equity and social justice, also makes it imperative to take into account the
economic conditions of large sections of the community that are less privileged
than Government employees and several of whom live below the poverty line.
c. Seventh Pay Commission - For fixing salary, the Commission has mainly been guided
by various factors like ensuring fair wages keeping in view the capacity of the
Government to pay, the inflationary impact of such increase on the economy in general.
But the spirit of prefaces and forewords as above, appeared to be lost sight of, if
analyzed from the angle of Paying Capacity of Common Man. During the period from 1947 to
2016, the Per Capita Income increased by 236.6 % whereas the Pay of Central Govt.
Employees increased by 382.4% in Purchasing Power Parity Terms. As a result comparative
increase in Pay during 1947 to 2016 had been approx 161.63% of the increase in Per Capita
Income of Indians.
The comparison of Per Capita Annual Income of Indians with what had been paid as
Average Pension and Average Pay & Allowances per employee; more clearly reflect the bitter
fact that Paying Capacity of Common Man had not been considered at all.
Table – 1. Average Amount Spent On Pay, Allowances & Pension Per Person Per Annum - Rs.
During Pay & Allowances Paid Pension & Commutation Paid
Year Rs Crs No. Employees Rs PA/Per Rs Crs No. Pensioners Rs PA/Per
2014-15 242081 4712000 513754 118465 5196000 227993
2015-16 258760 4673000 553734 125842 5310000 236991
2016-17* 290900 4680000 621581 142600 5390000 264564
2016-17# 359300 4680000 767735 176300 5390000 327087
Table – 2. AVERAGE PAY & AVERAGE PENSION PER HEAD OF EMPLOYEES Vs PER CPITA INCOME OF INDIANS
During Pay P.A./Empl/Head As %age of Pension As %age of Per Capita Average As %age of
Year Per Empl. Fmly Of 3 Per Capita Per Head Per Capita Income Pay Out Per Capita
2014-15 513754 171251 195.16% 130282 148.47% 87748 150767 171.82%
2015-16 553734 184578 197.85% 135423 145.16% 93293 160001 171.50%
2016-17* 621581 207194 201.15% 151179 146.77% 103007 179186 173.96%
2016-17# 767735 255912 248.44% 186907 181.45% 103007 221409 214.95%
2016-17*- The Estimates before Implementation of Seventh Pay Commission Pay Revisions. 2016-17#- The Estimates after Implementation of Seventh Pay Commission Pay Revisions.
Sources - Indian Public Finance Statistics, Ministry of Finance, CPC Reports,
Economic Survey 2013-14, 2014-15 Data Book to PC – Union Budget 2014-15- 2015-16, www.indiabudget.nic.in
https://dbie.rbi.org.in/DBIE/dbie.rbi?site=home,http://planningcommissionarchive.nic.in/
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THE PREFACE AND FOREWORD OF CPC –
“Fair comparison based on principles of equity and social justice, also makes it imperative to
take into account the economic conditions of large sections of the community that are less
privileged than Government employees and several of whom live below the poverty line”
The Table – 2, Above Glaringly Tells the Truth of Principles of Equity and Social
Justice
Where the Spirit of prefaces & forewords lost sight of by Pay Commissions-
1. Exorbitant High Increase In Fifth Pay Revision
Starting from Fifth Pay Commission on the plea of vast change of global economy, a
notion was developed that the avenues for talented young persons have opened up; and
several of them are being hired by the private sector for emoluments much higher than in
the government sector.
Mere comparison of the pay without taking cognizance of the total package of
allowances and benefits available within the Government can never be appropriate especially
as the value of pension granted by the Government and the value of job security provided
cannot be undermined since they form major components of the total package. Moreover,
job related stress is significantly lower in the Government and work schedules provide a
more favourable work-life balance.
The fact was that keeping aside the CEOs of Corporate, the common working
employees of Private Sector were not being paid higher than the Govt. employees.
Still an impression was created that to retain the talented persons in Govt Services;
pay has to be competitive with pay in private sector. There was no data of talented
employees leaving the Govt. Service, particularly related to persons /top officers at policy
making level of the Government.
Through the findings of the previous pay commission it is found that “Group A”
employees form, less than 5 per cent of the total Central government workforce; Group C
and D are about 90 per cent. Second, it noted that a government job offers many other
benefits not available in the private sector and the fear of flight away from public service
towards the private sector is overblown.”
Despite the above facts being in the knowledge of the Pay Commissions, the special
chapter/ paragraph were written by CPCs to justify the edge to given to IAS officers in
terms of pay. The pay commission termed them as “Core” of the Government, and the
number of such top officers in Central Govt, had been around 26000 to 28000.
To justify much higher payment to this limited number of Officers, the whole paradigm of
payment comparable with private sector was built–up, & the fear of flight away from public
service towards the private sector was created right from Fifth Pay Commissions Reports. An
exorbitant Increase of 40% was given in this pay revision, which was all time high.
The implementation of The Fifth Pay Revision disturbed the financial situation of both the
Central and the State Governments and led to a hue and cry after its implementation. The
Central government's wage bill before the implementation of the commission’s
recommendations was 218.85 billion in 1996-1997 which also included pension dues and by
1999 it shot up by about 99% and the burden on the exchequer was about to Rs. 43,568
crore in 1999-2000
The World Bank criticized the Fifth Pay Revision, stating that the Fifth Pay Revision is the
'single largest adverse shock' to the public finance of the nation. It also said that the number
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of employees of the government was 'not unduly' large, but there was a 'pronounced
imbalance' in the skills. It noted that about 93% of the employees were of 3rd or 4th grade.
From Fifth Pay Commission onwards the focus of the Commissions got shifted mainly to
increase the emoluments of Govt. Employees, particularly of top officers in Central Govt.
2. Running Pay Scale & Grade Pay with 3% PA compounded increment In Sixth
CPC
The pay scales revised by Fifth CPC had a sufficiently long span to ensure that the
employees did not stagnate after getting the benefit of prescribed financial upgradations
recommended under ACPS. However, during implementation the Government increased the
fitment benefit to 40% as against 20% recommended by the Fifth CPC. Many of the pay
scales got `burst’ at the time of initial fixation where revised pay of some of the
employees became higher than the maximum of the revised pay scale and,
therefore, had to be fixed at the maximum of the revised pay scale at the initial
stage itself. These employees, therefore, had started to stagnate right from the time of
implementation of the Fifth CPC pay scales.
The sixth pay commission instead of suggesting correction recommended 31%
increase in Pay Revision and suggested Running Pay Scale & Grade Pay with 3% PA
compounded increment. This resulted in further higher increase in Pay & Allowance of
Govt. Employees.
The compulsion of visible acceptable Ratio of Maximum pay to Minimum pay to rest
around 12:1 benefited the all other cadres of Govt. Employees; and the paying
capacity of country got lost sight of.
It is evident from the Para 4.2.12 of Seventh CPC Report as under -
Quote – “To obtain a comparative picture of the salaries paid in the government with
that in the private sector enterprises the Commission engaged the Indian Institute of
Management, Ahmedabad to conduct a study. According to the study the total
emoluments of a General Helper, who is the lowest ranked employee in the
government is Rs 22,579, more than two times the emoluments of a General Helper
in the private sector organizations surveyed at Rs 8,000 - Rs 9,500.”
All the above facts were in the knowledge of the Pay Commissions, but the trend of
giving additional amounts by one or other way started. Most of such increases given were
not pressed by the Govt employees. These decisions increased the Pay, Allowances and
Pension and exorbitant load on exchequer of Govt. based on the CPC recommendations.
Other Factors That Increased the Pay, Allowances and Pension
Payments to Govt. Employees 161% Extra Compared to Increase
In Per Capita Income of Indians During 1947 To 2016
3. By Higher Dearness Allowance - More than 100% Neutralizations
Pay Commissions increased dearness allowance of the Central Government employees and
gave higher and higher benefits under the improved formula -
a. The III Central Pay Commission recommended payment of DA whenever the CPI rises by
8 points over the index of 200 (with base 1960 = 100). The extent of neutralization
ranged from100% to 35%.
b. The IV Central Pay Commission recommended the grant of DA on a 'percentage system'
of the basic pay (1986). The extent of neutralization now ranged from 100% to 65%.
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c. The V Central Pay Commission looked into the issue of differential neutralization and
found it to be injustice to senior officers and recommended uniform neutralization of
100% to employees at all levels.
It is established facts that increase in CPI, which is based on items of consumptions
needs, effects 100% to the employees getting minimum subsistence wages derived in
accordance with norms of Indian Labour Conference of 1957. Higher is the Basic Pay lesser is
impact of Increase in CPI. This was the logic behind tapered DA rates that were neutralized
from 100% to 35% till 1986 and from 100% to 65% during 1986 to 1996.With 100%
neutralizations across at all scales from 1996 onwards, the employees with Basic Pay above
the minimum of scale are being paid, on head of DA, amounts higher than the actual impact
of increase in CPI, on them.
d. The V CPC also suggested that dearness allowance should be converted into dearness pay
every time the cost of living rises by 50% over the base level. As per recommendation of
V CPC the Government merged 50% of the DA with basic pay w.e.f. 1.4.04 and the
dearness allowance continued to be calculated with reference to the AICPI (IW) average
as on 1st January 1996 of 306.33 without changing the base consequent to the merger.
As a consequence, salaries of Government employees are being neutralized more than
hundred per cent. It was continued in Sixth Pay Revision, although commented by Sixth
CPC, but no corrective step either suggested or taken as yet. More than 100%
neutralization is still continuing since 1.4.2004.
Resultantly the very logic that there is always lesser impact of CPI increase over and
above minimum subsistence basic pay, was kept aside in 1996 to Govt Employees and all
those who are drawing higher Basic Pay are getting extra amount over & above the real
impact on their consumptions needs that measures the CPI.
4. Many Allowances were linked to increase in DA-
Besides Dearness Allowance various allowances like House Rent Allowance. CCA,
Traveling Allowance & T.A. on Transfer, Transport Allowance, Non-practicing Allowance, Risk
Allowance, Uniform related Allowances, Deputation Allowance, and Education Allowance etc
are paid to Govt. Employees. These were revised upward in every Pay Revisions, but by a
decision in Sixth CPC, most of these allowances were linked to Dearness Allowance-
Viz-The rates of all the above allowances shall automatically increase by 25% whenever the
Dearness Allowance payable on the revised pay bands goes up by 50%.
It to be noted that in the year 2008 when most of the State Governments
were paying Rs.2500/-& 3500/-Per Month to Primary & Middle School Teachers
(Samvida Shikshak), the amount of education allowance to Govt Employee was
Rs.1000/ per Child for TWO children and Hostel Subsidy was Rs.3000/- Per Child.
By Seventh Pay Commission this amount is increased to Rs.1500/ &
Rs.4500/ per month per child. Children Education Allowance being the absolute
amount is the same across all ranks.
It also may not be out of place to mention here that during the period 2007-
08, the Teachers (Samvida Shikshak ) appointed in primary schools of U.P. were
being paid Rs.2200/ Per Month on contractual basis for a term of 3 years and in
2010-11 they were appointed as Shiksha- Mitra. After a judgment by Court all such
approx. 1.35 lacs teachers have been dismissed and are now path of agitation.
Today only they had planned demonstrations in capital - Lucknow, but were
detained, by police in nearby cities of Lucknow.
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5. By merger of higher DA amounts & increase over it in Pay Revisions
As has been reflected that the conversion of dearness allowance into dearness pay every
time the cost of living rises by 50% over the base level, was compensating more than 100%
of increase in CPI since 1.4.2004, but the whole of that was merged for arriving at Revised
Basic Pay and additional percentage increase were given in Sixth & Seventh Pay Revisions of
2006 & 2016.
6. By Improvement in Pension Terms & Increase In Rate of Pension
a. Third CPC - Increased the pension of civilians, who retired at 58, by 20 percent, from
30 to 50 percent. There was no demand.
b. The Fifth CPC- Increased the percentage of commutable pension from 33% to 40%
of pension along with its restoration after 12 years.
c. The Fifth CPC - The rates of family pension increased from 12% to 30% of the last
pay drawn for all.
d. Sixth CPC -Payment of full pension on completing 20 years of qualifying service,
instead of 33 years as was being paid. It too was without any pressure from
Pensioners.
e. Sixth CPC - Additional quantum of 20%,30%,40%,50% and 100% of pension was
given to Pensioners and Family Pensioners on attaining the age of 80, 85, 90, 95 and
100 years . No logic for such increase in pension in a country whose approx 25%
population is below poverty line.
f. Sixth CPC- Enhanced rate of Family Pension Period increased from 7 years to 10
Years.
g. Sixth CPC – Updating the Pension of all past Pensioners was done by fitment benefit
equal to minimum of 40% of corresponding Basic Pay in revised scale. This was aimed
at being consistent with the fitment benefit being allowed in case of the existing
employees. Consequently all old pensioners got pension increased by 186%
7. By Improvement in other retirement benefits
a. Increase of Encashment of leave – Fourth CPC increased the encashment of
earned leave from 180 days to 240 days and the Fifth CPC to 300 days, making Half
Pay Leave also, en-cashable at the rate equal to half the amount of leave salary
payable during Earned Leave without any reduction being made on account of pension
payable.
b. In Fifth CPC – The encashment of leave was allowed while availing Family Pension.
c. Gratuity - Sixth CPC - The maximum limit of Rs.3.5 lacs on payment of gratuity
increased to Rs.10 lacs and now to Rs.20 lacs – Tax Free.
CONCLUSIONS
A. Big Question On The Very Idea Of Paying Higher Pay To Retain The Talant?
The whole paradigm of payment comparable with private sector was built–up, & the fear
of flight away from public service towards the private sector was created right from Fifth Pay
Commissions Reports and exorbitant high increase in pay was given in Fifth Pay Commission
& Sixth Pay Commissions, as an effort to retain the talent officers in Govt. Service. But it is
surprising that Sixth Pay Commission Recommended a VRS Scheme, as under –
Sixth CPC at Para 11.36 A liberal severance package for employees leaving service
between 15 to 20 years of service.
At Para 6.2.10 The Commission, accordingly, recommends that all Central Government
employees seeking voluntary retirement on completion of qualifying service equal to or
more than 15 years but less than 20 years should be paid one time, lump-sum,
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retirement benefit equal to 80 months’ salary last drawn or average salary, whichever is
more beneficial to the retiring employee inclusive of benefits like service gratuity and
death cum- retirement gratuity that shall stand subsumed.
Analysis of the recommendation –
1. Permitting the employees who are in the age group of 40-45 with experience of 15-19
years to leave the service, is totally against the very purpose of retaining by higher
pay.
2. In this CPC eligibility for full pension was reduced to 20 years of service.
3. As per Pension Rules on voluntary retirement notional addition of 5 years is made for
Pension Fitment, thus employee on voluntary retirement after 15 years will be eligible
for Full Pension @ 50% of last basic and will earn 6 months of pay in a year.
4. By lump-sum, payment of such retirement benefit equal to 80 months’ salary, he will
be earning interest @8% and the amount will be equal to 6.4 months pay per year.
5. Thus employee getting voluntary retirement after 15 years service will be earning
12.4 months pay, having corpus of 80 month’s salary and opportunity to earn from
other sources being free at the age of 40 years with 15 years experience.
Can any employer think of motivating his experienced employee to leave service at above
cost? But Sixth CPC recommended for it.
B. Clean Hands of CPC By Saying (“provided growth is secured as planned”)
The seventh CPC while giving 23.5% increase in pay has given the ideology of paying
capacity as under -–
Para No.2.1.10. … no fiscal space available to increase the share of the total spending on PAP
other than that afforded by GDP growth. The share of PAP in total revenue expenditure
will, at best, stay constant over the medium term.
Para No. 2.1.11 - It therefore follows that any increase in PAP that can be financed
without jeopardizing the government’s macro fiscal parameters can, in the medium term, at
most be equal to the growth rate of GDP. Of course, due to the peripatetic, decennial,
occurrence of the Pay Commission recommendations this condition cannot be met in the
initial year of award, as the award has to adjust for many cumulative factors that have
negatively impacted the purchasing power of the PAP over the historical medium term. Even
so it is important to ensure that the increase in the PAP-GDP ratio in the initial year of the
award is moderate, so that it stabilizes over the medium term (provided growth is
secured as planned).
The Seventh Pay Revision is to cost the government Rs.102100 Crore in 2016-2017, the
Commission has estimated.
In 2013-2014, the government spent nearly 69.4% of its receipts on paying salaries,
pensions and interest on its accumulated debt, and repaying the debt that fell due. In 2015-
2016, this had gone up to nearly 75.3%.Where will it be in 2017-18 after seventh pay
revision?
To sum up it can be said that the Govt. of the People need to be awaken and the
directive principles of state policy that are in the nature of directives by Constitution, to the
Government to implement them for establishing social and economic democracy in the
country are to be remembered and enforced by such awakening.
With best wishes
S.K.MISHRA – BHOPAL – 22-08-2017
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THEORY OF RELATIVITY OF INJUSTICE IN OUR COUNTRY
Dear Friends,
Do not get surprised by reading the subject head. It is true in our country. The concluded
injustice to one class of employees should not always be taken as injustice to all other
employees, even if they are on same footings.
This is what our bureaucrats have proved by their actions. Please study the attached file and
think.
Thank God we have not redefined the applicability of values and ethics on the theory of
relativity.
The Rule Found As Injustice to Central Govt. Employees,
Continued to RBI Employees for 17 Years and
Still Continuing to Employees of Banks & LIC for More Than 21 Years
DA rates were tapered from 100% to 35% during the period from 1976 to 1986 and
were improved a little by reducing the tapering up to 65% for years 1986 to 1996 for Central
Govt. Employees. The Fifth Commission looked into the issue of differential neutralization
and found it to be injustice to senior officers and recommended uniform neutralization of
100% to employees at all levels. This was given effective from 1-1-1996. (Refer Chapter
105, para 105.9 of V CPC)
But for the employees of all the Public Sector Undertaking the tapering that was as
low as up to 25%, was not considered as injustice. For employees, may be of R.B.I., Public
Sector Banks, LIC, General Insurance etc the said injustice continued. It is still continuing
with a large number of Pensioners of the P.S.Us.
Why So?
The Regulatory Acts applicable to these different PSUs does not permit their Boards to
decide the terms of Pay & Pension. It has to be first got approved by the Government of
India, through the Ministry of Finance. Here the role of bureaucrats, in Ministry of
Finance comes into picture. They are entrusted with the responsibility of putting the
proposals of Pension/Pay Revisions moved by the Boards of PSUs for approval of G.O.I. The
bureaucrats, who considered tapered DA rates as unjustified for themselves & got their
100% DA neutralization way back in 1996,did not acted upon the proposals by Boards of
RBI & LIC, rather put the hurdle in the name of Regulatory Acts applied to the PSUs.
Here are the examples –
1. Reserve Bank of India –
The Reserve Bank by circular dated September 1, 2003, revised and updated the pension
of pre-2002 retired pensioners from the year 2002.This stared giving 100% DA
Neutralisation to RBI Pensioners. But under directions of G.O.I. Ministry of Finance, it was
withdrawn by another circular of RBI dated October 10, 2008.
Writ Petition No W.P. No. 710/2009 was filed by Arvind Ganesh Karnik and ors.in
Mumbai High Court against RBI and Union of India on issue of withdrawal of said updating.
The High Court issued order to the effect that GOI should clarify the position. The Ministry of
Finance by letter F.No.I.6/1/58/2008-IR Dated 23.10.2009, took the stand that Board of RBI
is to obtain prior sanction of GOI under Section 58 of RBI Act, 1934 for any such decision,
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which Board has not obtained. The Board is not entitled to assume, usurp and exercise such
powers, which are not vested with it.
It is interesting to note that the unauthorized updated pension was paid by RBI to pre-2002
retired pensioners for “FIVE Years” form Sept-2003 to Sept-2008 & it was not recovered as
per letter by Ministry of Finance. The said updating was withdrawn only. For such
“Unauthorized Payment of Crores of Rupees, No Accountability” was fixed either on
RBI or on bureaucrats, who were responsible to exercise timely supervision on
such decisions by the Board ob RBI.
2. Life Insurance Corporation of India-
Board of Life Insurance Corporation of India on 24th November, 2001, passed a
resolution as is extracted below:-
“Amendment to LIC of India (Employees) Pension Rules, 1955 – UPGRADING OF Basic
Pension to AICPI 1740 Points and 100% DA neutralization thereon in respect of Retirees prior
to 01.08.1997”
Corporation wrote to the Joint Secretary (Insurance & Banking) on 31st December, 2001,
seeking amendment to the 1995 Rules. Nothing happened thereafter, thus it was not
implemented by LIC.
Aggrieved by the non-execution of the resolution passed by the Corporation preferred
Krishna Murari Lal Asthana & Ors, filed S.B. Civil Writ Petition No.654 of 2007 before the
High Court of Rajasthan at Jaipur. It was decided in favour of pensioners, but the matter
reached up to Supreme Court Level. There were two more WPs decided By High Court of
Delhi and by High Court of Punjab & Haryana, before the Supreme Court. The counsel for LIC
pleaded that for conferment of benefit, either pension or anything ancillary thereto has to be
first got approved by the GOI as prescribed under Section 48 and 49 of the LIC Act.
The Supreme Court decided on 31-3-2015 to transfer all three cases to High Court of
Delhi with direction to decide the constitutional validity of Para 3A of the Appendix to
the Rules. This “Para 3 A” differentiated the pensioners for benefit of 100% DA
neutralization, on the basis of Cut-Off date.
As directed by Supreme Court the Delhi High Court decided the matter by judgment
dated 27-4-2017. Delhi Court did not decide constitutional validity of Para 3A of the
Appendix to the Rules, rather commented at Para 8 as under -
“------------ the issue which survives for consideration and has to be answered relates to
the validity of Rule 3(A) which is restricted to employees, who have retired or died on or
after 1st day of August, 1997. “This, as noticed below, is not the primary issue.”
“The core issue is the prayer of the retired employees/ associations that all retirees prior
to 1st August, 1997 should be given full neutralization and upgradation of basic pension with
effect from 1st August, 1997, ensuring uniform pension for all retired employees, irrespective
of the date of retirement and emoluments drawn at the time of retirement. . In other words,
the retired employees seek enforcement of the precept of ―One Rank One Pension‖, by
judicial verdict contrary to the Rule position.”
The Delhi High Court rigidly sticking and confining to the prayer of the retired
employees/associations did not tested the Rule 3(A) on its constitutional validity. Going
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further Delhi High Court came out with new term “equalization” and decided that the tapered
DA rates should not be lower than 0.23% for the purpose of equalization. It created new
aspect to be adjudged further. The LIC pensioners are now again in Supreme Court.
Thus shunting of legitimate claim by LIC Pensioners for 100% DA neutralization is
continuing.
Nowhere any of the courts had the questioned the bureaucrats for not acting
timely or not replying to Proposal of Board of LIC forwarded to Joint Secretary
(Insurance & Banking) on 31st December, 2001.
Pension Regulations in-acted for RBI were based on Central Civil Services (commutation
of Pension) Rules, 1981 applicable for Central Government employees, and if the tapered DA
rates that were considered as injustice & the injustice was removed in year 1996 itself for
Central Govt. employees, why it could took more than 17 years to accept the same for RBI
and is not considered as injustice meted to LIC and or Bank Pensioners for around 21 years
by now.
No one can ask them this question. It can also not be questioned that when the Pension
Regulations in-acted for LIC and Banks are also in the lines of Pension Rule to RBI, why the
100% DA neutralization is not being given to LIC & Banks in line which was adopted for RBI
way back in 2013.
It is established and commonly accepted fact that no one questions the bureaucrats for
their not responding or not replying even to the Boards of R.B.I. of LIC, what to talk
of Common Man.
The common man cannot ask any “Babu” even of municipal to reply to the
legitimate application/request submitted. It is up to the wishes and convenience of
“Babu” whether to reply or not.
It was only by way of kindness of bureaucrats that they forwarded to G.O.I. the
proposal of RBI for 100% DA neutralization and improvement in family pension
granted to RBI pensioners from Jan-2013.
Please study and think.
Yours
S.K.MISHRA – BHOPAL – 3-10-2017
***************
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Dear Friends, BHOPAL - 23-12-2017
PENSION FUND OF ALLAHABAD BANK
Much is talked about the pension cost & pension fund of the Banks. Some of the
pensioners’ & retirees’ organizations have commented that banks have not contributed
properly in the pension funds. Some commented that the pension fund has grown by interest
income and the value of pension fund is sufficient to cover the pension updating also.
While I have with me, the consolidated data of pension liabilities of all Nationalised
Banks for the period from 2008 to 2017, I think it proper, not to offer my opinion on the
comments as above by of some retirees’/pensioners’ organization. Rather, I leave it to you
all to form a correct opinion of your own on the subject matter. In this respect I am
appending the figures of our Bank - Allahabad Bank for last 7 years, as of each year ended
March, on Pension Liability arrived at by approved actuaries, the value of Pension Fund, the
interest income from pension fund, the amount of pension payouts and the amounts
contributed by Allahabad Bank for meeting the pension liability as per accounting standards.
Please study it and form a correct view on the subject matter of Pension Liability of
Bank Vs Pension Fund maintained, by our Bank. The similar had been the position/pattern of
other public sector banks, on Pension Liability, Pension Fund and contribution by banks. The
Pension Liability of all nationalized banks was assessed at Rs. 31012.41 crores as on March
2007 and it was assessed to the level of Rs.164488.72 crores as on March-2017.The banks
have paid the pension amounting to Rs. 62104.35 crores & earned interest of Rs. 67392.00
crores on Pension Funds during the period from 1-4-2007 to 31-3-2017. To meet the pension
liability as assessed by actuaries, these banks have contributed Rs 128188.86 crores in
pension funds during last 10 years.
PENSION FUND OF ALLAHABAD BANK
Value of Pension Liability of Allahabad Bank Vs Value of Investments by Pension Fund Trust (Rs Crores)
In Year Ended March 2011 2012 2013 2014 2015 2016 2017
Pension Liability at beginning of year 1870.71 2578.78 3174.75 3697.49 4143.65 4561.30 5214.71
Interest income from pension fund 149.66 206.30 206.81 312.89 319.60 329.81 349.85
Pension paid during year 141.27 167.50 192.89 243.27 297.29 368.99 419.49
Pension Liability at the year end 2578.77 3174.75 3697.49 4143.65 4582.02 5186.91 5777.90
Amt. added by Bank to meet liab. 699.67 557.17 508.82 376.54 416.06 664.79 632.83
Pension liab. to be covered by fund 2578.77 3174.75 3697.49 4143.65 4582.02 5207.63 5770.81
Fair Value of Pension Fund 1781.59 2571.85 3289.10 4093.13 4561.30 5214.71 5770.06
Unfunded Amount Of Pension Liability 797.18 602.90 408.39 50.52 20.72 -7.08 0.75
Unfunded Permitted By RBI Circular 797.18 602.90 408.39 50.52 N/A N/A N/A
Pensioners in Pension Reg -1995 8499 9290 10157 11164 12293 13255 14277
Employees in Pension Reg -1995 20157 19261 18281 17213 15832 14352 12792
Total Empls & Pensrs in Pen Reg-1995 28656 28551 28438 28377 28125 27607 27069
Value of Investments by Pension Fund Trust of Allahabad Bank (Rs Crores)
In Year Ended March 2011 2012 2013 2014 2015 2016 2017
Central Govt. Securities 380.37 572.49 502.9 495.27 480.76 566.84 687.21
State Govt. Securities 665.78 814.76 1309.06 1765.37 2023.85 2462.91 3026.4
High Quality Corporate Bonds 705.15 1033.63 1291.63 1619.24 1813.57 2156.8 2040.87
Special Deposit Scheme 15.14 10.29 10.53 10.23 10.03 12.52 15.58
Other Investment 15.14 140.68 174.98 207.11 233.08 156.44 0
Total Value of Pension Fund Assets 1781.59 2571.85 3289.1 4097.22 4561.3 5355.51 5770.06
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Investment Percentage by Pension Fund Trust of Allahabad Bank
In Year Ended March 2011 2012 2013 2014 2015 2016 2017
Central Govt. Securities 21.35% 22.26% 15.29% 12.10% 10.54% 10.87% 11.91%
State Govt. Securities 37.37% 31.68% 39.80% 43.13% 44.37% 47.23% 52.45%
High Quality Corporate Bonds 39.58% 40.19% 39.27% 39.56% 39.76% 41.36% 35.37%
Special Deposit Scheme 0.85% 0.40% 0.32% 0.25% 0.22% 0.24% 0.27%
Other Investment 0.85% 5.47% 5.32% 5.06% 5.11% 3.00% 0.00%
Total 100.00% 100.00% 100.00% 100.10% 100.00% 102.70% 100.00%
Important Notes by Auditors on Pension Fund as appeared in annual reports of
Allahabad Bank for some important relevant years are appended-
Year 2011-
a. By judgment & order of Hon’ble Supreme Court of India in the matter of pension (old)
makes gratuity payment obligatory on the part of the Bank to the old scheme pensioners.
Bank discontinued the old pension scheme w.e.f. October 2010 simultaneously paying
gratuity to these pensioners. Hence, further provisioning is neither made nor required in
respect of Pension (Old) as on 31.03.2011 and in future.
Out of the accumulated provision for Pension (Old) amounting to Rs 168.77 Crore as at
the time of discontinuation of the Scheme, Rs.150.00 Crore has been utilised towards
provisioning against Bank’s liabilities in respect of Additional Load on account of 2nd
Option for Pension (ABEPR-1995) by a section of employees.
The remaining Rs.18.77 Crore has been transferred to ‘Outstanding Liabilities A/C’
to club with an earlier provision of Rs.33.00 Crore made in F.Y. 2009- 10, towards
payment of gratuity in compliance of Hon’ble Supreme Court’s Order, making total
provision on this score to the tune of Rs.51.77 Crore. Out of this, payment to the tune of
Rs.32.61 Crore has already been made to those whose names appeared in the Pension
Scroll under the Scheme in October 2010 and some of the legal heirs of eligible deceased
ex-employees whose claims were received. The balance Rs.19.16 Crore is considered to
be sufficient to meet the payment liability to the remaining judgement beneficiaries.
b. During the year, the Bank reopened the pension for such of its employees who did not opt
for the pension scheme under Allahabad Bank (Employees’) Pension Regulations 1995
earlier. As a result of exercise of pension option by 11557 employees, Bank had incurred
huge liability towards additional load amounting to Rs. 708.07 Crore for Pension which
were to be amortised in terms of Reserve Bank of India circular DBOD
No.BP.BC.80/21.04.018/2010-11 dated 9th February, 2011 in five years at 1/5th of load
each year.
For Second Option the payments were made in Feb-2011- The Pension & Commutation
Paid was Rs. 1928.69 Crores and Contribution received from employees/ retirees was Rs
1220.62 Crores. The Gap of Rs. 708.07 Cores was permitted by RBI to be amortized in
five years i.e. years 2012, 2013, 2014 & 2015.
c. The Bank has since completed the process of implementing wage revision on account of
9th Bipartite Settlement/ Joint Note dated 27.04.2010. The exercise, including payment of
Bank’s contribution to PF on arrear salary, has been completed within the aggregate
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
provision of Rs.275.00 Crore held by the Bank as on 31.03.2010 (Rs.122 Crore and
Rs.153 Crore provided in F.Y. 2008-09 and 2009-10, respectively). The ad-hoc provision
from earlier F.Y. amounting to 47.00 Crore has been applied towards Bank’s liability in
respect of Additional Load on account of 2nd Pension Option
Year 2015 – Unamortized Pension and Gratuity Liabilities:
On re-opening of Pension option to employees under Allahabad Bank (Employees’) Pension
Regulations 1995 and enhancement in Gratuity limits under the Payment of Gratuity Act
1972 during the financial year 2010-2011, the Bank had incurred huge liability towards
additional load amounting to Rs.708.07 Crore for Pension and Rs.39.63 Crore for Gratuity,
which were amortised in terms of Reserve Bank of India circular DBOD
No.BP.BC.80/21.04.018/2010-11 dated 9th February, 2011. As per the provisions of the
said circular, 1/5th of the amortised expenses is to be absorbed each year and
accordingly, Rs.747.70 Crore (i.e.Rs.708.07 Crore for Pension and Rs.39.63 Crore for
Gratuity) has been charged to the Profit and Loss Account in F.Y. 2010-11, 2011-12,
2012-13 & 2013-14, and 2014-15. Following the said directive of the Reserve Bank of
India, during the current financial year the Bank has charged a sum of Rs.149.36 Crore
(i.e. Rs.141.66 Crore for Pension and Rs.7.70 Crore for Gratuity) to the Profit and Loss
Account. The unamortized amount carried forward is Nil.
Sincerely yours
S.K.MISHRA
State President- All India Allahabad Bank Pensioners & Retirees Association – M.P. State, and
Secretary- Allahabad Bank Retirees’ Welfare Society, Bhopal
BHOPAL - 23-12-2017
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Dear Friends, Bhopal 31-12-2017
ELIGIBILITY OF BENEFIT OF REG-26 TO SVRS 2000 SCHEME PENSIONERS
There are some pensioners who had retired under Special VRS 2000 in the year 2001. They
are eligible or not for benefit of the Reg- 26 is questioned, because the Reg-26 provides
benefit only for “superannuation pension” (Not for any other class of pension).
Here is the explanation as to how SVRS 2000 Scheme pensioners are also eligible for
benefit of Reg-26 -
i. After introduction of SVRS 2000 Scheme in the year 2000, Bank at the direction by the
Government through I.B.A. amended the Regulation-28 of Pension Regulation 1995. It was
mainly aimed to include the retires who have served for more than 15 years but
less than 20 years as they were not falling under any category for pension
eligibility.
ii. By amending Regulation -28, Banks included all the retirees of Special Voluntary
Retirement Scheme 2000 under the definition of superannuation pension.
The copies of letters in this matter are as under -
The copy of letter of Govt. Of India, Ministry of Finance to
I.B.A. for amendment is as under-
"F.No.4/8/4/2000-IR New Delhi, the 5th Sept 2000
Government of India , Ministry of Finance
Department of Economic Affairs, (Banking Division)
To
The Personnel Advisor, Indian Bank's Association,
Mumbai.
Sub: Amendment to Regulation 29 of the Pension Regulations.
Sir,
I am directed to refer to this Division's letter No.11/1/99 IR dated 29th August 2000
conveying Government's no objection for circulation of Voluntary Retirement Scheme in
Public Sector Banks. The scheme, inter-alia, provides that employees with 15 years of
service or 40 years of age shall be eligible to take voluntary retirement under the scheme. As
per provisions contained in Regulation 29 of Pension Regulations an employee can take
voluntary retirement after 20 years of qualifying service and thereafter becomes eligible for
pension. Thus employees having rendered 15 years of service or completing 40
years of age but not having completed 20 years of service shall not be eligible for
pensionary benefits on taking voluntary retirement under the scheme.
In order to ensure that such employees do not lose the benefit of pension, IBA
may work out modalities and suggest amendments, if any, required to be made in the
pension regulations to ensure that these employees also get the benefit of pension.
Yours faithfully,
Sd/-
(U.P. Singh)
Director (IR)"
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Letter by IBA to Banks for amending Pension Regulation 1995 for the purpose of
implementation of SVRS 2000 Scheme
PD/CIR/76/G2/G4/ December 11, 2000
Designated officers of all Public Sector Banks.
Dear Sirs,
Voluntary Retirement Scheme in Public Sector Banks
Amendments to Bank, (Employees') Pension Regulations, 1995.
Please refer to our circular letter No. PD/CIR/76/G4/933 dated 31st August 2000
convening the 'No Objection' of the Government in banks adopting and implementing a
voluntary retirement scheme for employees on the lines of what was contained in the
Annexure to the circular. As per the scheme, an employee who is eligible and applies for
voluntary retirement is entitled for the benefit of CPF, Pension, Gratuity and encashment
of accumulated privilege leave, as per rules. Bank (Employees') Pension Regulations, 1955
do not have provisions enabling payment of pension to an employee who retires before
attaining the age of superannuation except under circumstances as in Regulations 29, 30,
32 and 33.
We had, therefore, taken up with the Government the need to incorporate
necessary provisions in the Pension Regulations by way of amendments to Regulation 28
so that employees who retire as above under special/ad hoc schemes formulated by the
banks, after serving for a prescribed minimum period would be eligible for pro rata
pension. Government of India has after examining the proposal conveyed its approval and
desired that IBA advise banks to make necessary amendments to their Pension
Regulations as in the Annexure. We request banks to take note accordingly. Please note
that with the above amendments, employees who apply for voluntary retirement after
having rendered a minimum of 15 years of service under a special/adhoc scheme
formulated with the specific approval of the Government and the Board of Directors will be
eligible for pro rata pension for the period of service rendered as they are to retire
on attaining the age of superannuation on that date.
Yours faithfully,
sd/-
(Allen C A Pereira)
PERSONNEL ADVISER
Thus IBA and GOI letters as above clearly spell that SVRS 2000 Scheme Pensioners are
getting Superannuation Pension under amended Reg-28 and not under Reg-29 .If it is not
so then those who had put in less than 20 years of service cannot be given pension under
Reg-29 as per Pension Regulations 1995, then what category of pension they are being paid
by Banks? What is the answer?
They are being paid pension under amended Reg-26 hence all SVRS Scheme Pensioners
forming uniform group are under amended Reg-26and are getting Superannuation Pension.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
Further important notes to support view that SVRS 2000 Scheme Pensioners are
getting Superannuation pension are submitted here under-
a. The definition of Superannuation pension in Pension Regulation 1995
Prior to Amendment it was under Regulation 28
28. Superannuation Pension. - Superannuation pension shall be granted to an employee
who has retired on his attaining the age of Superannuation specified in the Service
Regulations or Settlements.
But for operation of VRS 2000 Special Scheme, at the instance of IBA and with
the approval of the Central Government, Regulation 28 was amended. The
amendment was carried out in the year 2002 with retrospective effect from September 1,
2000. By way of amendment, a proviso has been inserted to Regulation 28, which reads as
follows:
28. Superannuation Pension under amended Regulation 28
"Provided that pension shall also be granted to an employee who opts to retire before
attaining the age of superannuation, but after having served for a minimum period of
15 years in terms of any scheme that may be framed for the purpose by the
Bank's Board with the concurrence of the Government."
Note - The circulars were issued in March 2001, by the Banks relating to amendment of
Regulation 28 after the closer of date of applications submitted by employees for VRS. These
applications could not be withdrawn as per terms of VRS 2000 Scheme.
b. Further it may be pleased that SVRS 2000 Scheme pensioners have been given benefit of
Regulation 29(5) as per Supreme Court orders dated 27-3-2009 in cases of Bank of India
vs. K.Mohan Das and also Supreme Court orders on 14-2-2014 against Allahabad Bank &
Vijay Bank. The cases against Allahabad Bank & Vijaya Bank were decided based on case
of Bank of India Vs. K.Mohandas.
In this connection we are to study the important notes from Supreme Court judgment
the judgment dated 27-03-2009 of the Supreme Court in Civil Appeal No 1942 of 2009
K. Mohandas and others
i) In judgment dated 27-03-2009 the Supreme Court at para 27 termed the VRS 2000
Scheme as a contract.
Quote –
“27 .In view of the admitted position that VRS 2000 was a contractual scheme;
that it was an invitation to offer containing a term that optee will also be eligible for pension
as per Pension Regulations; that an application by an employee for voluntary retirement was
a proposal or offer and that upon acceptance of the application for voluntary retirement
made by the employee and a communication of acceptance to him, the concluded contract
came into existence and the offeree was relieved from the employment, for consideration of
the question posed herein, the court need to examine the contract and the circumstances in
which it was made in order to see whether or not from the nature of it, the parties must have
made their bargain on the footing that a particular thing or state of things would continue to
exist.”
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
ii) Going further the Supreme Court at para 32 commented as under –
Quote -
“32. The fundamental position is that it is the banks who were responsible for
formulation of the terms in the contractual Scheme that the optees of voluntary
retirement under that Scheme will be eligible to pension under Pension Regulations,
1995, and, therefore, they bear the risk of lack of clarity, if any. It is a well-known
principle of construction of contract that if the terms applied by one party are
unclear, an interpretation against that party is preferred”
iii) In judgment dated 27-03-2009 the Supreme Court while ordering for benefit of Reg29
(5) to VRS 2000 Scheme Pensioners had not declared Regulation 28 as ultra vires.
At Para 40 Supreme Court observed and concluded as under -
Quote -
“40. It was submitted on behalf of the banks that amendment to Regulation
28 has neither been challenged nor the said Regulation has been declared ultra vires
and, therefore, that provision cannot be rendered otiose by taking recourse to
Regulations 29. It is true that validity and legality of Regulation 28 has not been put in
issue. It was apparently not done because, according to the employees, amended
Regulation 28 although made retrospective could not have affected the concluded
contract. We have already indicated above as to how the amendment in Regulation 28
in the year 2002 with effect from September 1, 2000 could not have applied to the
optees under the Scheme who had completed service of 20 years. Lack of challenge to
the Regulation 28 by the employees is, therefore, not very material. It is not correct to
say that by taking recourse to Regulation 29, the amendment to Regulation 28
is rendered otiose.”
iv) Finally the Supreme Court at para 53 decided the issue as under-
Quote -
“53.We hold, as it must be, that the employees who had completed 20 years of
service and were pension optees and offered voluntary retirement under VRS 2000
and whose offers were accepted by the banks are entitled to addition of five years
of notional service in calculating the length of service for the purposes of that
Scheme as per Regulation 29(5) of the Pension Regulations, 1995. The contrary view
expressed by some of the High Courts, do not lay down the correct legal position.
CONCLUSION – SUPREME COURT RULED THAT “ employees who had completed 20
years of service and were pension optees and offered voluntary retirement under VRS
2000 and whose offers were accepted by the banks are entitled to addition of five
years of notional service in calculating the length of service for the purposes of that
Scheme”.
So the addition of notional maximum 5 years was given to those VRS
pensioners who had completed service of more than 20 years as a term of
concluded contract that Supreme Court had decided.
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
v) Moreover in the year 2010, Bank opened the Second Option for Pension to retired bank
employees who remained under CPF. This option was given to “Retired Employees retired
on “superannuation”. But the SVRS 2000 retired employees were treated at par with
those retired on “superannuation” and were given second pension option. This was in line
with amendment done in Reg-28 for the purpose of eligibility of pension to SVRS 2000
retirees.
The details are as under -
Allahabad Bank by Instruction Circular No.11143/PA/2010-11/27 dated 15.09.2010 for
Extension of another option to join the Pension Scheme under Allahabad Bank
(Employees’) Pension Regulations, 1995 in terms of Settlement/ Joint Note dated 27th
April, 2010 offered as under-
At Para 3 of Circular - Salient Terms for offer of Another Option were
The terms and conditions for offer of the option are set out below for information of all
concerned:-
3.1 Option will be accepted only from those existing employees, employees retired on
superannuation, employees voluntarily retired under the special voluntary retirement
scheme (ABEVRS-2000) and families of deceased employees/retirees who fulfill the
eligibility criteria set out under Paragraph 1 above, received by the Bank between
20.09.2010 and 18.11.2010 (both days inclusive), in prescribed format at designated
places….
3.3 Employees who ceased to be in service in any other manner than those mentioned
in paragraph 3.1 above (namely, by way of resignation, voluntary retirement other
than those under ABEVRS-2000, on account of punishment imposed on them, etc.) or
their family members, are not eligible to exercise option for pension in terms of the
Settlement/Joint Note dated 27.04.2010.
In view of the facts as above the Pensioners retired under Special Voluntary
Retirement Scheme 2000 are at par with retirees on superannuation, hence they are
also eligible for benefit of Reg-26.
S.K.MISHRA –BHOPAL – 31-12-2017
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ALLAHABAD BANK RETUREES’ WELFARE SOCIETY, BHOPAL (M.P.)
UNITED WE CAN
SO POWERFUL IS THE LIGHT OF UNITY THAT IT CAN ILLUMINATE THE WHOLE EARTH
ALLAHABAD BANK RETIREES’ WELFARE
SOCIETY,BHOPAL(M.P.)